Press Releases

Waterloo Brewing Quarterly EBITDA surges 61.5% versus prior year

Second Quarter Highlights:

  • Net revenue increased 44.4% to $24.6 million, up from $17.0 million in the prior year.
  • Gross margin declined slightly to 30.9%, compared to 34.1% the prior year.
  • Selling, Marketing, and Administration expenses were $3.4 million, down from $3.8 million prior year.
  • EBITDA* increased 61.5% to $5.8 million, compared to $3.6 million prior year.
  • Core owned brands (+28% versus prior year) are becoming formidable competitors in the highly profitable beer and beverage alcohol categories.
  • The Board of Directors approved the quarterly dividend, $0.02625/share, payable October 30, 2020, to shareholders of record as of October 16, 2020. The dividend is classified as an eligible dividend.

First Half Highlights:

  • Net revenue increased 34.3% to $39.4 million up from $29.4 million in the prior year.
  • Gross Margin was flat at 28.6% compared to the prior year.
  • Selling, Marketing, and Administration expenses were $6.3 million up slightly from $5.9 million prior year.
  • EBITDA* increased 51.1% to $7.9 million, compared to $5.2 million in the prior year.

KITCHENER, ON, Sept. 3, 2020 /CNW/ - Waterloo Brewing Ltd. ("Waterloo Brewing" or the "Company") (TSX: WBR), Ontario's first craft brewery, announced financial results for the second quarter ending July 26, 2020. Waterloo Brewing reported EBITDA growth of +61.5% to $5.8 million on net revenue of $24.6 million.

"The strength of our business strategy has been put to the test in these past few months, and it has been reassuringly successful," said George Croft, President, and CEO, Waterloo Brewing. "Our choice to embrace our Ontario roots reflects growing consumer interest in buying local. Our choice to provide reliably good value reflects the challenges of hardworking people's budgets. Our choice for a diverse portfolio of value, premium and craft beers, complemented by our Seagram family of ciders, coolers and future beverage alcohol innovation, is growing at +28% versus prior year. This is an exciting chapter of intensive growth and expansion for our Company."

"This past quarter is a watershed moment for our business," continued Croft. "firmly establishing the foundation of healthy brands, superior quality standards, relentlessly efficient operations and the solid financials needed to become a formidable player in the national beverage alcohol market."

"These past few months have also reinforced just how important our hometown of Kitchener-Waterloo is to our business, and we are to the community," continued Croft. "The outstanding growth we're experiencing is the result of a commitment from everyone here at Waterloo Brewing to help each other through this time, and help our Company and our community emerge stronger for the experience."

Waterloo Brewing's board of directors has approved the quarterly dividend at $0.02625/share.  The dividend is payable on October 30, 2020, to shareholders of record as of October 16, 2020.

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







 Quarter ended 

 Fiscal year-to-date ended 

(in thousands of dollars)

July 26, 2020

July 28, 2019

July 26, 2020

July 28, 2019






Net income

$

2,221

$

952

$

1,926

$

845






Add (deduct):





Income tax expense

953

347

827

347

Depreciation and amortization

1,889

1,387

3,626

2,822

Gain (loss) on disposal of property, plant & equipment and right-of-use assets

(4)

(1)

214

(14)

Share-based payments

196

274

365

350

Finance costs

526

416

954

680

Subtotal

3,560

2,423

5,986

4,185






EBITDA *

5,781

3,376

7,912

5,030

 

STATEMENTS OF COMPREHENSIVE INCOME


 Quarter ended 

 Fiscal year-to-date ended 


 July 26, 2020 

July 28, 2019

 July 26, 2020 

July 28, 2019






Revenue

$

24,573,498

$

17,014,274

$

39,415,977

$

29,357,153

Cost of sales

16,988,040

11,208,470

28,133,486

20,944,163

Gross profit

7,585,458

5,805,804

11,282,491

8,412,990






Selling, marketing and administration expenses

3,422,457

3,784,237

6,261,706

5,857,451

Other expenses

466,877

307,532

1,099,697

697,720

Finance costs

525,975

416,469

954,420

680,262

Loss (gain) on disposal of property, plant and equipment, and right-of-use assets

(3,658)

(1,133)

214,405

(14,213)

Income before tax

3,173,807

1,298,699

2,752,263

1,191,770






Income tax expense

952,949

346,846

826,485

346,846

Net income and comprehensive

$

2,220,858

$

951,853

$

1,925,778

$

844,924

income











Basic earnings per share

$

0.06

$

0.02

$

0.05

$

0.02

Diluted earnings per share

$

0.06

$

0.02

$

0.05

$

0.02

 

STATEMENTS OF FINANCIAL POSITION


 Quarter ended 


July 26, 2020

January 31, 2020




ASSETS



Current assets



Cash

$

8,603,232

-

Accounts receivable

8,818,191

$

4,976,226

Inventories

11,359,975

10,482,912

Prepaid expenses

765,560

787,448


29,546,958

16,246,586

Non-current assets



Property, plant and equipment

38,220,164

32,808,678

Right-of-use assets

27,017,924

27,840,996

Intangible assets

15,106,213

15,184,333

Construction deposits

1,296,460

1,050,425


81,640,761

76,884,432

TOTAL ASSETS

111,187,719

93,131,018




LIABILITIES AND EQUITY






Current liabilities



Bank indebtedness

-

783,077

Accounts payable and accrued liabilities

30,981,970

12,909,771

Current portion of lease liabilities

2,599,943

2,869,733

Current portion of long-term debt

3,227,603

2,946,038


36,809,516

19,508,619

Non-current liabilities



Provisions

988,994

958,025

Lease liabilities

22,284,877

23,226,137

Long-term debt 

14,000,160

13,342,788

Deferred income tax liability

3,035,432

2,208,947


40,309,463

39,735,897

TOTAL LIABILITIES

77,118,979

59,244,516

Equity



Share capital

38,884,048

39,126,283

Share-based payments reserves

2,453,637

2,108,671

Deficit

(7,268,945)

(7,348,452)

TOTAL EQUITY

34,068,740

33,886,502




COMMITMENTS






TOTAL LIABILITIES AND EQUITY

$

111,187,719

$

93,131,018

 

STATEMENTS OF CASH FLOWS

Cash Flow Statements






 Quarter ended 

 Fiscal year-to-date ended 


 July 26, 2020 

July 28,2019

 July 26, 2020 

July 28, 2019






Operating activities





Net income

$

2,220,858

$

951,853

$

1,925,778

$

844,924

Adjustments for:





Income tax expense

952,949

346,846

826,485

346,846

Finance costs

525,975

416,469

954,420

680,262

Depreciation and amortization of property, plant and 

1,888,290

1,388,160

3,623,969

2,821,975

equipment, right-of-use assets and intangibles

Loss (gain) on disposal of right-of-use assets

(3,658)

(1,133)

214,405

(14,213)

Share-based payments

195,712

274,105

365,184

350,629

Change in non-cash working capital related to operations

11,600,805

1,060,176

13,335,325

4,682,982

Less:





Interest paid

(464,854)

(298,290)

(878,808)

(588,469)

Cash provided by operating activities

16,916,077

4,138,186

20,366,758

9,124,936






Investing activities





Purchase of property, plant and equipment, net of reimbursements

(2,947,759)

105,556

(7,055,464)

(2,810,155)

Construction deposit paid

(1,296,460)

(49,481)

(1,296,460)

(49,481)

Proceeds from sale of right-of-use assets

2,538

964

2,538

14,044

Purchase of intangible assets

(1,287)

(9,980)

(23,100)

(123,821)

Cash generated from (used in) investing activities

(4,242,968)

47,059

(8,372,486)

(2,969,413)






Financing activities





Decrease in bank indebtedness

(1,036,758)

(945,896)

(783,077)

(1,887,253)

Issuance of long-term debt, net of fees

-

-

2,041,549

-

Repayment of long-term debt

(559,814)

(465,533)

(1,107,521)

(900,328)

Repayment of obligation under finance lease

(552,207)

(315,720)

(1,433,267)

(624,230)

Dividends paid

(1,846,271)

(884,530)

(1,846,271)

(884,530)

Issuance of shares, net of fees

-

-

-

1,480

Shares repurchased and cancelled, including fees

(152,767)

(190,392)

(340,393)

(480,068)

Proceeds from stock option exercise

77,940

57,199

77,940

59,779

Cash used in financing activities

(4,069,877)

(2,762,041)

(3,391,040)

(4,732,319)






Net increase in cash

8,603,232

1,423,204

8,603,232

1,423,204






Cash, beginning of period

-

-

-

-

Cash, end of period

$

8,603,232

$

1,423,204

$

8,603,232

$

1,423,204






Non-cash investing and financing activities:





Acquisition of assets under lease 

$

233,343

$

-

$

233,343

$

-











About Waterloo Brewing

Waterloo Brewing 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, Waterloo Brewing Ltd. (formerly Brick Brewing Co. Limited) was the first craft brewery to start up in Ontario and is credited with pioneering the present day craft brewing renaissance in Canada. Waterloo Brewing has complemented its Waterloo premium craft beers with the popular Laker brand.  In 2011, Waterloo Brewing purchased the Canadian rights to Seagram Coolers and in 2015, secured the exclusive Canadian rights to both LandShark and Margaritaville. In addition, Waterloo Brewing utilizes its leading-edge brewing, blending, and packaging capabilities to provide an extensive array of contract manufacturing services in beer, coolers, and ciders. Waterloo Brewing trades on the TSX under the symbol WBR. Visit us at www.WaterlooBrewing.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 or loss on disposal of property, plant, and equipment and right-of-use assets, 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.

Waterloo Brewing Logo (CNW Group/Waterloo Brewing Ltd.)

SOURCE Waterloo Brewing Ltd.

For further information: David J. Birch, Chief Financial Officer, (416) 895-4824, E-mail: info@waterloobrewing.com