Brick Brewing Reports Record Full-year EBITDA, ex one-time costs, of $9.0MM

 

KITCHENER, Ontario, April 12, 2018 (GLOBE NEWSWIRE) -- Fourth Quarter Highlights:

  • Net Revenue for the quarter increased to $10.7 million compared to $10.5 million in the fourth quarter of fiscal 2017.
  • Gross Profit margin for the quarter was 29.1%, a decrease from 32.1% in prior year.
  • Selling, Marketing and Administration expenses of $2.1 million, compared to prior year at $2.3 million.
  • EBITDA* for the quarter was $1.81 million, compared to prior year EBITDA of $1.77 million.
  • The Board of Directors re-affirmed the quarterly dividend, at $0.02/share, payable May 22, 2018 to shareholders of record as of May 8, 2018. The dividend is classified as an eligible dividend.

Full Year Highlights:

  • Net Revenue increased to $49.8 million, from $45.2 million in the prior year.
  • Gross Profit margin was 28.7% and 30.4% ex one-time costs, a decrease from 34.8% in prior year.
  • Selling, Marketing and Administration expenses decreased to $9.14 million, down from $9.25 million in prior year.
  • EBITDA was $8.2 million and $9.0 million, ex one-time costs, up from $8.8 million in the prior year.

Brick Brewing Co. Limited (“Brick” or the “Company”) (TSX:BRB), Ontario’s largest Canadian-owned brewery, today released results for the fourth quarter and full year ended January 31, 2018.  Brick recorded annual EBITDA (ex one-time costs) of $9.0 million on a Net Revenue of $49.8 million. EBITDA for the fourth quarter was $1.81 million.

George Croft, Brick President and Chief Executive Officer commented, “We are pleased with the growth of our owner brands and co-pack business.  The integration of our operating facilities is now complete, and we look forward to the challenge of delivering exceptional results in the upcoming year.  We experienced challenging market conditions during 2017 with a cool, wet summer which drove overall full-year industry volume lower by 5.1%.  Despite the category declines, Laker grew 6% in the year, Waterloo was up 10% and the LandShark and Margaritaville family grew 45%.  We are excited about a new can line upgrade project that is well under way and will double our canning capacity. We expect to leverage the increased capacity and improved supply chain efficiencies over the next fiscal year in both our own branded volumes and with our contract manufacturing.

Brick reported 28% growth or $2.3 million in contract manufacturing revenue for the year, the result of growth with both current and new customers.

Croft added, “We have recently announced a number of new products and packaging, including Chudleigh’s Cider, Waterloo Radler Sampler and Landshark draft that we are confident will resonate with our consumers. We are also excited about the upcoming craft offerings which we believe will be a key element in realizing our growth targets in the year ahead.  All of these contribute to our confidence in our ability to deliver value and growth to our shareholders for the long term.”

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, 2018.

 
Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization, and Share Based Payments (EBITDA)*
    
 Fiscal year ended
(in thousands of dollars) 
January 31, 2018 
 January 31, 2017
     
Net income$   2,602 $  3,997 
     
Add (deduct):    
Income tax expense   1,044     1,345 
Depreciation and amortization   3,528     2,876 
Loss on disposal of property, plant and equipment and intangibles   131     - 
Share-based payments   316     147 
Finance costs   546     478 
Subtotal   5,565     4,846 
     
EBITDA*   8,167     8,843 
     


STATEMENTS OF COMPREHENSIVE INCOME
Years ended January 31, 2018 and 2017

   January 31, 2018   January 31, 2017 
     
Revenue$   49,790,034 $  45,176,380 
Cost of sales   35,509,607     29,464,917 
Gross profit   14,280,427     15,711,463 
       
Selling, marketing and administration expenses   9,142,571     9,248,039 
Other expenses   814,256     643,273 
Finance costs   545,990     478,181 
Loss on disposal of property, plant and equipment and intangibles   131,068     -  
Income before tax   3,646,542     5,341,970 
       
Income tax expense   1,044,075     1,345,158 
Net income and comprehensive income for the year$   2,602,467  $  3,996,812 
     
     
Basic earnings per share$   0.07  $  0.11 
Diluted earnings per share$   0.07  $  0.11 
     


STATEMENTS OF FINANCIAL POSITION
As at January 31, 2018 and 2017

  January 31, 2018  January 31, 2017 
   
ASSETS  
Non-current assets  
Property, plant and equipment$   27,119,488  $  21,709,425 
Intangible assets   15,381,578     15,499,186 
Construction deposits   323,255     2,462,328 
    42,824,321     39,670,939 
   
Current assets  
Cash   -      2,831,959 
Accounts receivable   6,999,212     7,035,714 
Inventories   7,891,364     5,619,329 
Prepaid expenses   613,710     593,180 
    15,504,286     16,080,182 
       
TOTAL ASSETS   58,328,607  $  55,751,121 
   
LIABILITIES AND EQUITY  
Equity  
Share capital   39,747,525     39,651,096 
Share-based payments reserves   1,026,667     943,565 
Deficit   (2,547,746)   (2,758,560)
TOTAL EQUITY   38,226,446     37,836,101 
   
Non-current liabilities  
Provisions   538,376     411,599 
Obligation under finance lease   3,011,893     3,781,855 
Long-term debt    6,019,245     2,498,580 
Deferred income tax liabilities   1,126,464     82,389 
    10,695,978     6,774,423 
   
Current liabilities  
Bank Indebtedness   787,843     -  
Accounts payable and accrued liabilities   6,516,382     9,655,405 
Current portion of obligation under finance lease   769,962     741,297 
Current portion of long-term debt   1,331,996     743,895 
    9,406,183     11,140,597 
       
TOTAL LIABILITIES   20,102,161     17,915,020 
   
COMMITMENTS  
   
TOTAL LIABILITIES AND EQUITY$   58,328,607  $  55,751,121 
   


STATEMENTS OF CASH FLOWS
Years ended January 31, 2018 and 2017

  January 31, 2018 January 31, 2017
   
Operating activities  
Net income$   2,602,467  $  3,996,812 
Adjustments for:  
Income tax expense   1,044,075     1,345,158 
Finance costs   545,990     478,181 
Depreciation and amortization of property, plant and equipment and intangibles   3,527,762     2,875,958 
Loss on disposal of property, plant and equipment and intangibles   131,068     -  
Share-based payments   316,209     147,292 
Change in non-cash working capital related to operations   (5,422,741)   1,320,659 
Less:  
Interest paid   (463,782)   (395,851)
Cash provided by operating activities   2,281,048     9,768,209 
   
Investing activities  
Purchase of property, plant and equipment   (8,160,391)   (2,578,913)
Construction deposit paid   (323,255)   (2,462,328)
Proceeds from sale of property, plant and equipment, net   2,032,266     -  
Purchase of intangible assets   (281,417)   (144,194)
Cash used in investing activities   (6,732,797)   (5,185,435)
   
Financing activities  
Increase in bank indebtedness   787,843     -  
Issuance of long-term debt, net of fees   5,126,215     2,000,000 
Repayment of long-term debt   (1,024,640)   (1,597,179)
Repayment of obligation under finance lease   (741,297)   (713,699)
Dividends paid   (2,391,653)   (1,822,177)
Issuance of shares, net of fees   60,050     45,867 
Shares repurchased and cancelled, including fees   (322,629)   (266,856)
Proceeds from stock option exercise   125,901     209,584 
Cash generated from (used in) financing activities   1,619,790     (2,144,460)
   
Net increase/(decrease) in cash   (2,831,959)   2,438,314 
   
Cash, beginning of year   2,831,959     393,645 
Cash, end of year$   -  $  2,831,959 
   

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:
David Birch, Chief Financial Officer
(519) 742-2732 Ext. 106
E-mail: info@brickbeer.com