Brick Brewing Reports Third Quarter EBITDA of $1.4M and Year-to-date EBITDA of $3.6M

 

Third Quarter F2015 Highlights:  

  • Net Revenues for the third quarter of fiscal 2015 were $9.3 million compared to $9.6 million in the third quarter of fiscal 2014.
  • Gross profit margin for the quarter finished at 26.6%, down from 31.6% in the third quarter of fiscal 2014. Year-to-date gross margin is 27.1%, up from 26.1% prior year.
  • Selling, Marketing and Administration ("SM&A") expenses were $1.9 million, up nominally from $1.8 million in the prior year.
  • EBITDA* for the third quarter of fiscal 2015 of $1.4 million compared to EBITDA in the third quarter of fiscal 2014 of $1.9 million. Year-to-date EBITDA is $3.6 million, up from $3.2 million prior year.

KITCHENER, ON, Dec. 11, 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 released its financial results for the third quarter of its 2015 fiscal year.  Net revenues were $9.3 million for the third quarter while EBITDA for the third quarter was $1.4 million.  Year-to-date, EBITDA was $3.6 million, vs $3.2 million for the prior year.

Waterloo craft brands performed well, posting volume growth exceeding 50%.  Waterloo growth was broad based, with the introduction of Waterloo Grapefruit Radler being supported by growth in the core product offerings - Dark, IPA, Pilsner and Amber- as well as the Summer seasonal mix pack.  Seagram vodka cooler volume was negatively impacted by discontinued product listings in the LCBO, however both Seagram cider and Seagram malt-based coolers generated strong growth in the quarter.  Laker volume declined in the quarter, driven by a Laker 12 pack launch promotion in the prior year that did not repeat and an overall decline in industry volume.  Additionally, the quarter benefited from strong year-over-year improvement in co-pack production. Gross margin in the quarter was impacted primarily by shifts in product mix and higher costs of brewing materials. Through the first three quarters, gross margin % has improved to 27.1% vs. 26.1% in the comparable period for the prior year.

George Croft, Brick Brewing's President and Chief Executive Officer noted, "We're very pleased with the results we're reporting today, particularly in Waterloo craft. Our focus on driving growth in this important and growing category is paying dividends.  Also, last year's results were somewhat volatile quarter to quarter, and this year we expected a return to more normalized quarterly performance.  This is what we've seen, with Q3 results reflecting a more traditional seasonal decline coming out of the peak summer months.  The exceptional growth in our Waterloo craft premium brands, along with improvement in pricing, the attention to cost control and operating efficiency, all contributed to our strong year-to-date performance."

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, 2014.

Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization, and Share Based Payments (EBITDA)*
















Quarter ended


Fiscal year ended

(in thousands of dollars)


October 26, 2014


October 27, 2013


October 26, 2014


October 27, 2013














Net income


$

609


$

683


$

848


$

280














Add (deduct):














Income tax expense



164



227



251



89


Depreciation and amortization



888



789



2,424



2,272


Loss (gain) on disposal of property, plant and equipment



(446)



-



(439)



(15)


Share-based payments



29



45



92



146


Finance costs



111



148



415



475

Subtotal



746



1,209



2,743



2,967














EBITDA*



1,355



1,892



3,591



3,247

 

STATEMENTS OF COMPREHENSIVE INCOME
For the periods ended October 26, 2014 and October 27, 2013
(Not audited or reviewed by the Company's external auditor)



 Quarter ended 


 Fiscal year-to-date ended 



 October 26, 2014 

 October 27, 2013 


 October 26, 2014 

 October 27, 2013 








Revenue


$

9,261,324

$

9,561,744


$

27,215,971

$

29,718,744

Cost of sales


6,801,951

6,537,642


19,842,343

21,947,508

Gross profit


2,459,373

3,024,102


7,373,628

7,771,236

Selling, marketing and administration expenses


1,896,213

1,771,749


5,902,189

6,433,112

Other expenses


125,385

194,208


397,139

494,091

Finance costs


110,791

147,882


414,552

474,812

Gain on disposal of property, plant and equipment


(446,329)

-


(438,984)

-

Income before tax


773,313

910,263


1,098,732

369,221








Income tax expense


164,400

227,000


251,155

89,000

Net income and comprehensive
  income for the period


$

608,913

$

683,263


$

847,577

$

280,221















Basic earnings per share


$

0.02

$

0.02


$

0.02

$

0.01

Diluted earnings per share


$

0.02

$

0.02


$

0.02

$

0.01

 

STATEMENTS OF FINANCIAL POSITION
As at October 26, 2014 and January 31, 2014
(Not audited or reviewed by the Company's external auditor)



October 26, 2014 


January 31, 2014 




ASSETS




Non-current assets




Property, plant and equipment

$

15,520,382

$

15,449,248


Intangible assets

15,049,173

14,752,855


Deferred income tax assets

2,297,577

2,548,732


32,867,132

32,750,835





Current assets




Cash

2,695,180

-


Accounts receivable

6,659,810

5,865,024


Inventories

3,788,221

3,951,436


Assets held for sale

-

3,406,400


Prepaid expenses

416,270

395,559


13,559,481

13,618,419




TOTAL ASSETS

46,426,613

46,369,254




LIABILITIES AND EQUITY




Equity




Share capital

39,393,721

38,955,236


Share-based payments reserves

1,046,386

1,060,533


Deficit

(6,654,967)

(7,502,544)


TOTAL EQUITY

33,785,140

32,513,225





Non-current liabilities




Provisions

302,697

289,083


Obligation under finance lease

1,003,382

-


Long-term debt and promissory note

3,020,438

4,265,018


4,326,517

4,554,101





Current liabilities




Bank indebtedness

-

1,694,178


Accounts payable and accrued liabilities

6,165,756

6,050,679


Current portion of obligation under finance lease

37,162

-


Current portion of long-term debt and promissory note

2,112,038

1,557,071


8,314,956

9,301,928




TOTAL LIABILITIES

12,641,473

13,856,029




COMMITMENTS






TOTAL LIABILITIES AND EQUITY

$

46,426,613

$

46,369,254

 

STATEMENTS OF CASH FLOWS
For the periods ended October 26, 2014 and October 27, 2013
(Not audited or reviewed by the Company's external auditor)


 Quarter ended 


 Fiscal year-to-date ended 


 October 26, 2014 

 October 27, 2013 


 October 26, 2014 

 October 27, 2013 







Operating activities







Net income

$

608,913

$

683,263


$

847,577

$

280,221


Adjustments for:







Income tax expense

164,400

227,000


251,155

89,000


Finance costs

110,791

147,882


414,552

474,812


Depreciation and amortization of property, plant and
equipment and intangibles

887,535

789,426


2,424,065

2,271,642


Gain on disposal of property, plant and equipment

(446,329)

-


(438,984)

(15,093)


Share-based payments

29,167

44,538


92,353

146,341


Change in non-cash working capital related to operations

965,214

(1,699,060)


(112,012)

(1,835,966)


Less:







Interest paid

(62,036)

(128,579)


(325,729)

(403,742)

Cash provided by operating activities

2,257,655

64,469


3,152,977

1,007,215







Investing activities







Purchase of property, plant and equipment

(1,332,332)

(478,855)


(2,489,044)

(2,452,931)


Proceeds from sale of property, plant and equipment, net

3,356,397

-


3,356,397

203,000


Purchase of intangible assets

(4,198)

(1,447)


(309,818)

(261,883)

Cash provided by (used in) investing activities

2,019,867

(480,302)


557,535

(2,511,814)







Financing activities







Increase/(decrease) in bank indebtedness

(2,380,392)

1,934,615


(1,694,178)

(379,599)


Increase in obligation under finance lease

1,040,544

-


1,040,544

-


Issuance of long-term debt

-

-


-

1,185,912


Repayment of long-term debt

(242,494)

(1,609,806)


(693,683)

(2,120,837)


Issuance of shares

-

810


6,985

17,010


Proceeds from stock option exercise

-

-


325,000

-


Proceeds from warrants, net

-

(12,388)


-

2,802,113

Cash provided by (used in) financing activities

(1,582,342)

313,231


(1,015,332)

1,504,599







Net increase / (decrease) in cash

2,695,180

(102,602)


2,695,180

-







Cash, beginning of period

-

102,602


-

-







Cash, end of period

$

2,695,180

$

-


$

2,695,180

$

-

Additional Information

For further details the Company's complete management discussion and analysis (MD&A) and financial statements for the quarter ended October 26, 2014 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 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 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.

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 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, 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 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, 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

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