Brick Brewing Reports First Quarter F2018 EBITDA of $2.1M

 

KITCHENER, Ontario, June 01, 2017 (GLOBE NEWSWIRE) --

Highlights:

  • Net revenue increased to $11.5 million, from $9.5 million in the prior year.
  • Gross margin of 30.4% (and 33.1% excluding 1x costs) compared to 35% prior year.
  • Selling, Marketing and Administration (“SM&A”) expenses increased to $2.1 million from $1.9 million.
  • EBITDA improved to $2.1 million in the quarter, and $2.4M excluding 1x costs, vs. $1.9 million.
  • The Board of Directors re-affirmed the quarterly dividend, $0.016/share, payable July 25, 2017 to shareholders of record as of July 11, 2017. The dividend is classified as an eligible dividend.

Brick Brewing Co. Limited ("Brick" or the "Company") (TSX:BRB), the largest Canadian-owned brewery in Ontario, today released financial results for the first quarter ended April 30, 2017. Brick reported first quarter EBITDA of $2.1 million on net revenue of $11.5 million.

George Croft, Brick’s President and Chief Executive Officer commented, “We feel we’re off to a very strong start for fiscal 2018. Our Laker brand performed exceptionally well, delivering double digit volume growth and continuing the strong performance we saw last year. Waterloo continued to grow, despite the challenges of an increasingly competitive Ontario craft beer category. LandShark has quickly become a key contributor to our owner brand performance, remarkable when you consider the brand was first launched in April 2016. With the overall beer category declining approximately 1% in the first quarter, we believe we are winning market share and increasing the relevance of our brands with consumers.”

In the first quarter, Brick recorded $319 thousand in one-time costs associated with the transfer of production from Formosa to the Kitchener facility, primarily due to severance expenses in Formosa. Brick announced in January the intention to pursue a sale and exit of the Formosa facility, targeting an exit from Formosa by September 2017.

Brick’s Kitchener expansion, also announced in January, is well underway. Russell Tabata, Chief Operating Officer at Brick noted, “We anticipate completing the expansion on-budget and on-schedule. This is a major project for us and, once completed, will deliver recurring savings in the years ahead. The improved capabilities we’re implementing in Kitchener support growth in our branded business, as well as expanding our co-pack production volumes.” In the first quarter, Brick reported over 40% growth in co-pack revenues.

“This is a strong start, but we know we have much left to do,” added Croft. “The recently announced Waterloo packaging redesign is hitting store shelves now, and is a key element to driving improved growth in the Waterloo craft premium brand. As well, our operations team is highly focused on executing the capital expansion projects to drive recurring savings and simplification in the supply chain network. Our disciplined approach to capital investments is core to how we operate, and so will get continued close attention. It is this kind of discipline that allows us to create value for shareholders, through both share price appreciation and dividend payments.”

Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization, and Share Based Payments (EBITDA)*  
    
  Quarter ended   
(in thousands of dollars)April 30, 2017May 1, 2016  
     
Net income$   787 $788  
     
Add (deduct):    
Income tax expense   306  338  
Depreciation and amortization   817  667  
Share-based payments   43  27  
Finance costs   100  118  
Subtotal   1,266  1,150  
     
EBITDA*   2,053  1,938  
     



STATEMENTS OF COMPREHENSIVE INCOME  
Quarters ended April 30, 2017 and May 1, 2016  
  Quarter ended  
  April 30, 2017 May 1, 2016 
    
Revenue$   11,480,470 $9,519,934 
Cost of sales   7,995,399  6,187,732 
Gross profit   3,485,071  3,332,202 
      
Selling, marketing and administration expenses   2,118,307  1,881,202 
Other expenses   173,577  206,420 
Finance costs   100,469  118,362 
Income before tax   1,092,718  1,126,218 
      
Income tax expense   305,961  337,865 
Net income and comprehensive
  income for the quarter
$   786,757 $788,353 
    
    
Basic earnings per share$   0.02 $0.02 
Diluted earnings per share$   0.02 $0.02 
    

  

STATEMENTS OF FINANCIAL POSITION  
As at April 30, 2017 and January 31, 2017  
   
 April 30, 2017January 31, 2017
   
ASSETS  
Non-current assets  
Property, plant and equipment$   25,371,770  $21,709,425 
Intangible assets   15,636,553   15,499,186 
Construction Deposits   1,032,062   2,462,328 
    42,040,385   39,670,939 
   
Current assets  
Cash   256,611   2,831,959 
Accounts receivable   9,982,414   7,035,714 
Inventories   6,111,708   5,619,329 
Prepaid expenses   781,354   593,180 
    17,132,087   16,080,182 
TOTAL ASSETS$   59,172,472  $55,751,121 
   
LIABILITIES AND EQUITY  
Equity  
Share capital$   39,441,288  $39,651,096 
Share-based payments reserves   943,795   943,565 
Deficit   (1,971,803) (2,758,560)
TOTAL EQUITY   38,413,280   37,836,101 
   
Non-current liabilities  
Provisions   417,361   411,599 
Obligation under finance lease   3,592,095   3,781,855 
Long-term debt   4,050,950   2,498,580 
Deferred income tax liability   388,350   82,389 
    8,448,756   6,774,423 
   
Current liabilities  
Accounts payable and accrued liabilities   10,553,856   9,655,405 
Current portion of obligation under finance lease   748,362   741,297 
Current portion of long-term debt   1,008,218   743,895 
    12,310,436   11,140,597 
TOTAL LIABILITIES   20,759,192   17,915,020 
   
COMMITMENTS  
   
TOTAL LIABILITIES AND EQUITY$   59,172,472  $55,751,121 
   

 

 STATEMENTS OF CASH FLOWS
  
  Quarters ended April 30, 2017 and May 1, 2016  
   Quarter ended 
   April 30, 2017 May 1, 2016
    
 Operating activities  
 Net income$   786,757  $788,353 
 Adjustments for:  
 Income tax expense   305,961   337,865 
 Finance costs   100,469   118,362 
 Depreciation and amortization of property, plant and
  equipment and intangibles
   816,600   666,768 
 Share-based payments   43,104   26,759 
 Change in non-cash working capital related to operations   (2,715,305) (839,990)
 Less:  
 Interest paid   (107,751) (104,121)
 Cash (used in) provided by operating activities   (770,165) 993,996 
    
 Investing activities  
 Purchase of property, plant and equipment   (2,995,895) (615,718)
 Purchase of intangible assets   (190,150) (66,020)
 Cash used in investing activities   (3,186,045) (681,738)
    
 Financing activities  
 Issuance of long-term debt   2,000,000   2,000,000 
 Repayment of long-term debt   (183,761) (638,386)
 Repayment of obligation under finance lease   (182,695) (175,894)
 Issuance of shares, net of fees   5,173   7,968 
 Shares repurchased and cancelled, including fees   (322,629) (1,055)
 Proceeds from stock option exercise   64,774   3,934 
 Cash provided by financing activities   1,380,862   1,196,567 
    
 Net increase/(decrease) in cash   (2,575,348) 1,508,825 
    
 Cash, beginning of the period   2,831,959   393,645 
 Cash, end of the period$   256,611  $1,902,470 


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