Brick Brewing Announces Correction to Ontario Beer Tax Payable

 

Issues Guidance on Fourth Quarter Fiscal 2014 Results

KITCHENER, ON, March 10, 2014 /CNW/ - Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), the largest Canadian-owned and Canadian-based publicly held brewery in Ontario, today announced that it has recorded a beer tax correction which will impact the Company's Q4 and full year fiscal 2014 financial results. Including the impact of the beer tax correction, Brick expects to report EBITDA of $4.4 million to $4.6 million for fiscal 2014.

Brick has identified an error in its determination and filing of Ontario beer tax payable. The Company has omitted volume from the beer tax calculation in error, related to the free can-in-case promotion on Laker beers. The value of the error, covering the period from January 2011 through to January 2014, is approximately $1.3 million. Brick will be making a pro-active payment of the associated beer tax in March. "When we concluded there was an issue, we immediately took steps to quantify it, notified the Board and our external auditor, and we will be making a payment for the prior amounts this month." said George Croft, CEO at Brick.

The Company is working to finalize fiscal 2014 year end financial statements. Sean Byrne, CFO at Brick noted, "We are still working through the details, but given the error we're making a prompt, public disclosure." The Company expects the impact of the $1.3 million will be split approximately $0.7 million in fiscal 2014, $0.3 million in fiscal 2013 and $0.3 million in fiscal 2012. The prior period financial statements were not materially misstated and will not be refiled. Additionally, while the Company has not historically provided earnings guidance, given that this is an unusual circumstance, the Company is providing guidance for fourth quarter and full year results. Q4 EBITDA, including the $0.7 million impact of the beer tax correction, is expected in the range of $1.1 million to $1.3 million. As a result, the Company expects full year EBITDA of $4.4 million to $4.6 million, including the impact of the beer tax correction. For fiscal 2013 (and including the impact of approximately $0.3 million of beer tax correction) revised EBITDA will be approximately $4.2 million. More complete information will be included with the Q4 and full year earnings release, expected to be issued on schedule, on April 17.

The Board of Directors and the Audit Committee are working with the Company's auditors and management to complete and confirm the revisions required in the current period financial statements.

Cautionary Note and Forward-Looking Statements

This press release contains forward-looking statements, which can be identified by the use of statements that include words such as "developing", "expected", "will", or other similar words or phrases. Forward-looking statements express, as at the date of this press release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results. Forward-looking statements are based on certain assumptions, including the key assumptions and parameters on which such estimates are based, involve risks and uncertainties and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, entries, adjustments or delays as a result of the completion of the year end financial review, potential assessment of tax penalties, unanticipated audit findings and adjustments in connection with the completion of the year end financial statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results to be materially different from those planned, estimated, forecasted, projected or expected. The Company does not intend, and does not assume any obligation, to update forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. Readers should not place undue reliance on forward-looking statements.

About Brick Brewing

Brick 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 and is officially certified under British Retail Consortium (BRC) Global Standards for Food Safety, 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 brand premium craft beers with other popular brands such as Laker, Red Baron, Red Cap and Formosa Springs Draft.  In March 2011, Brick purchased the Canadian rights to the Seagram Coolers and now produces, sells, markets and distributes Seagram Coolers across Canada.  Brick trades on the TSX under the symbol BRB. Visit us at www.brickbeer.com.

* 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.

SOURCE Brick Brewing Co. Limited

Sean Byrne, Chief Financial Officer, Tel: (519) 742-2732 Ext.132; E-mail: info@brickbeer.com