BRICK BREWING ANNOUNCES FIRST QUARTER RESULTS, INCLUDING EBITDA(X) OF $595 THOUSAND

 
Brick beer brands deliver growth of 12.4% as industry declines 7.6% in the quarter

WATERLOO, ON, June 8, 2011 /CNW/ - Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), Ontario's largest Canadian-owned and Canadian-based publicly held brewery, today released its financial results for the first quarter ended May 1, 2011. Annual meeting details are included in this press release to assist shareholders that may be affected by the rolling postal strike.

"Our beer portfolio continued to be very strong in Q1 after a tremendous finish to fiscal 2011. The Laker trademark, which is our largest brand family, is positioned as the best beer value in Ontario and grew 25.8% year over year," said George Croft, President and CEO.

"The Seagram Coolers acquisition was significant for Brick, and solidifies our foundation for future growth," said Croft. "Our team is hard at work with changes that celebrate the rich tradition of, and potential for the Seagram trademark."

Financial highlights are as follows:

    <<
    -   Net revenues for the first quarter of fiscal 2012 were $8.1 million
        compared to $7.0 million in the first quarter of fiscal 2011.

    -   Sales volumes for Brick beer brands increased by 12.4% compared to
        the first quarter of fiscal 2011. Brick drove this sales growth
        despite unseasonably cool and rainy weather, which slowed sales for
        the overall industry.

    -   Gross profit percentage declined slightly from 22.1% to 20.7%, due to
        one-time costs related to Seagram trademark integration and
        preparations for a Global Food Safety certification. These one-time
        costs are expected to provide ongoing benefits to the company.

    -   EBITDA* for the period ended May 1, 2011 was $0.6 million, with a
        net loss of $0.1 million.
    >>

On February 1, 2011, the Company adopted International Financial Reporting Standards ("IFRS") for Canadian publicly accountable enterprises. Prior to the adoption of IFRS, the Company followed Canadian Generally Accepted Accounting Principles ("GAAP"). While IFRS has many similarities to Canadian GAAP, some of the Company's accounting policies have changed as a result of its transition to IFRS. The most significant accounting policy changes that have had an impact on the results of operations are discussed within the applicable sections of the Company's first quarter ended May 1, 2011 Management Discussion & Analysis ("MD&A") and interim Financial Statements filed on SEDAR.

The following financial statements should be read in conjunction with the audited annual financial statements of the Company. Certain prior year amounts have been adjusted to conform to IFRS.

Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)*

    <<
    (in thousands of dollars)                       Quarterly period ended
    -------------------------------------------------------------------------
                                                   May 1, 2011   May 2, 2010


    Net income (loss)                             $       (134) $        115

    Add:
      Future income tax expense                              -            80
      Amortization                                         623           635
      Interest expense                                     163            35
    -------------------------------------------------------------------------
    Subtotal                                               786           750

    Less:
      Future income tax recovery                            57             -
    -------------------------------------------------------------------------
    Subtotal                                                57             -

    EBITDA*                                              595           865
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

    For the quarters ended May 1, 2011 and May 2, 2010
    (Not audited or reviewed by the Company's external auditor)

                                                       Quarter       Quarter
                                                         ended         ended
                                                   May 1, 2011   May 2, 2010
    -------------------------------------------------------------------------

    Revenue                                       $  8,132,603  $  6,971,144
    Cost of sales                                    6,450,465     5,432,274
    -------------------------------------------------------------------------
    Gross profit                                     1,682,138     1,538,870
    -------------------------------------------------------------------------

    Selling, marketing and administration
     expenses                                        1,564,725     1,264,641
    Other expenses                                     145,695        44,450
    Finance costs, net                                 162,997        34,770
    -------------------------------------------------------------------------
    Profit/(loss) before tax                          (191,279)      195,009
    -------------------------------------------------------------------------

    Income tax expense/(benefit)                       (57,000)       80,000
    -------------------------------------------------------------------------
    Profit/(loss) for the period                      (134,279)      115,009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total comprehensive income/(loss) for
     the period                                   $   (134,279) $    115,009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic earnings per share                                 -             -
    Diluted earnings per share                               -             -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENT OF FINANCIAL POSITION

    As at May 1, 2011, January 31, 2011 and February 1, 2010
    (Not audited or reviewed by the Company's external auditor)

                                                                     Date of
                                                                  Transition
                                                                     to IFRS
                                                    January 31,   February 1,
                                     May 1, 2011          2011          2010
    -------------------------------------------------------------------------

    ASSETS
      Non-current assets
        Property, plant and
         equipment                  $ 18,288,245  $ 18,372,020  $ 17,637,515
        Intangible assets             13,678,383     6,062,187     5,731,954
        Other assets                      80,000        45,000       188,871
        Deferred income tax assets     2,930,000     2,873,000     1,600,000
    -------------------------------------------------------------------------
                                      34,976,628    27,352,207    25,158,340
    -------------------------------------------------------------------------

      Current assets
        Accounts receivable            7,466,962     4,519,591     2,357,069
        Inventories                    4,551,613     3,885,240     3,470,263
        Prepaid expenses                 385,076       321,899       412,351
    -------------------------------------------------------------------------
                                      12,403,651     8,726,730     6,239,683
    -------------------------------------------------------------------------

    TOTAL ASSETS                      47,380,279    36,078,937    31,398,023
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND EQUITY
      Equity
        Share capital                 34,624,528    34,598,668    34,678,264
        Share-based payments
         reserves                        941,159       933,323       845,113
        Retained earnings/(deficit)   (8,915,643)   (8,781,364)  (11,525,275)
    -------------------------------------------------------------------------
    TOTAL EQUITY                      26,650,044    26,750,627    23,998,102
    -------------------------------------------------------------------------

      Non-current liabilities
        Provisions                       173,655       170,908       160,581
        Long-term debt and
         promissory note               6,616,460     3,026,731     1,158,395
        Obligations under finance
         leases                           18,517        24,650       138,106
    -------------------------------------------------------------------------
                                       6,808,632     3,222,289     1,457,082
    -------------------------------------------------------------------------

      Current liabilities
        Bank indebtedness              3,497,044       371,543     1,792,406
        Accounts payable and
         accrued liabilities           8,997,947     4,948,039     3,187,915
        Current portion of long-term
         debt and promissory note      1,402,200       624,000       816,100
        Current portion of
         obligations under finance
         leases                           24,412       162,439       146,418
    -------------------------------------------------------------------------
                                      13,921,603     6,106,021     5,942,839
    -------------------------------------------------------------------------

    TOTAL LIABILITIES                 20,730,235     9,328,310     7,399,921
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    TOTAL LIABILITIES AND EQUITY    $ 47,380,279  $ 36,078,937  $ 31,398,023
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENT OF CASH FLOWS

    For the quarters ended May 1, 2011 and May 2, 2010
    (Not audited or reviewed by the Company's external auditor)

                                                       Quarter       Quarter
                                                         ended         ended
                                                   May 1, 2011   May 2, 2010
    -------------------------------------------------------------------------

    Operating activities
      Profit/(loss) for the period                    (134,279)      115,009
      Adjustments for:
        Income tax expense /(benefit)                  (57,000)       80,000
        Finance costs, excluding accretion             160,249        32,188
        Notional interest representing accretion         2,748         2,582
        Unrealized foreign exchange (gain)/loss        (13,489)      (34,140)
        Depreciation and amortization of property,
         plant and equipment and intangibles           617,613       635,159
        Share-based payments                            12,696        22,052
        Change in non-cash working capital
         related to operations                         322,494     1,600,432
    -------------------------------------------------------------------------
      Less:
        Interest paid                                  (96,268)      (32,087)
    -------------------------------------------------------------------------
    Cash provided by/(used in) operating
     activities                                        814,764     2,421,195

    Investing activities
      Purchase of property, plant and equipment       (524,421)   (1,447,259)
      Purchase of other assets                         (35,000)       92,477
      Purchase of intangible assets                 (7,625,613)      (29,389)
    -------------------------------------------------------------------------
    Cash provided by/(used in) investing
     activities                                     (8,185,034)   (1,384,171)

    Financing activities
      Increase/(decrease) in bank indebtedness       3,125,501      (936,966)
      (Decrease)/increase in obligations under
       finance leases                                 (144,160)      (41,708)
      Increase/(decrease) in long term debt          4,367,929       (58,350)
      Stock options and warrants exercised              21,000             -
    -------------------------------------------------------------------------
    Cash provided by/(used in) financing
     activities                                      7,370,270    (1,037,024)

    Net increase/(decrease) in cash                          -             -

    Cash, beginning of period                                -             -
    -------------------------------------------------------------------------

    Cash, end of period                                      -             -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    >>

Additional Information

For further details the Company's management discussion and analysis (MD&A) and unaudited consolidated financial statements for the quarter ended May 1, 2011 will be available on the investor section of the Brick Brewing website at www.brickbeer.com. 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.

Annual Meeting Update & Special Note to Shareholders

    <<
    WHAT:     Annual Meeting of Shareholders

    WHERE:    TMX Broadcast Centre, 130 King Street West, Toronto, Ontario

    WHEN:     Wednesday, June 22, 2011 at 1:00 p.m.
    >>

Due to the rolling postal strike, it is recommended that you vote electronically to ensure your vote is counted. Please refer to the online/telephone voting instructions in your shareholder package for more details.

If you have not yet received your materials please contact Computershare Investor Services Inc. - Shareholder Services Department at 1-800-564-6253 or 1-514-982-7555 to receive specific voting instructions.

About Brick Brewing

Brick Brewing Co. Limited is Ontario's largest Canadian-owned and Canadian-based publicly held brewery. The Company is a regional brewer of award winning premium quality and value beers. The Company, founded in 1984, was the first craft brewery to start up in Ontario, and is credited with pioneering the present day craft brewing renaissance in Canada. The Company has complemented its Waterloo family of premium craft beers with other popular brands such as Laker, Red Baron, Red Cap and Formosa Springs Draft. Brick trades on the TSX under the symbol BRB. Visit us at www.brickbeer.com.

Forward-Looking Statements

Except for the historical information contained herein, the discussion in this press release contains certain forward-looking statements that involve risks and uncertainties, such as statements of the Company's plans, objectives, strategies, expectations and intentions and include, for example, the statements concerning expected volumes, operating efficiencies and costs. 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 Company 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. These forward-looking statements are not guarantees and reflect the Company's views as of June 8, 2011 with respect to future events. Future events 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, including the statements regarding expected volumes, operating efficiencies and costs are based on, among other things, the following material factors and assumptions: sales volumes in the fiscal year ending January 31, 2012 ("fiscal 2012") will increase; no material changes in consumer preferences; brewing, blending, and packaging efficiencies will improve; the cost of input materials for brewing and blending will decrease; the cost of packaging materials will decrease; competitive activity from other manufacturers will continue; no material change to the regulatory environment in which the Company operates and no material supply, cost or quality control issues with vendors. Readers are urged to consider the foregoing factors and assumptions when reading the forward-looking statements and, for more information regarding the risks, uncertainties and assumptions that could cause the Company's actual financial results to differ from the forward-looking statements, to also refer to the remainder of the discussion in this press release, the Company's annual information form and various other public filings as and when released by the Company. The forward-looking statements included in this press release are made only as of June 8, 2011 and, except as required by applicable securities laws, the Company 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. 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.

For further information: George Croft, President and CEO, Tel: (519) 576-9519 Ext.247; E-mail: info@brickbeer.com