Press Releases

Brick Brewing Reports Second Quarter EBITDA of $1.7M

KITCHENER, ON--(Marketwired - September 10, 2015) - Brick Brewing Co. Limited (TSXBRB)

Highlights:

  • Net Revenue for the second quarter was $11.0 million compared to $10.4 million in the second quarter of fiscal 2015.
  • Gross profit margin for the quarter was 28.1% (29.8% excluding 1x costs), compared to 31.4% in the prior year.
  • Selling, Marketing and Administration ("SM&A") of $2.0 million, down from the prior year at $2.3 million.
  • EBITDA* for the second quarter of fiscal 2016 increased to $1.7 million compared to EBITDA* in the second quarter of fiscal 2015 of $1.6 million.

Brick Brewing Co. Limited ("Brick" or the "Company") (TSXBRB), Ontario's largest Canadian-owned brewery, today released financial results for the second quarter ended July 26, 2015.

Net Revenues for the second quarter of fiscal 2016 grew to $11.0 million, up from $10.4 million in the second quarter of fiscal 2015. Excluding the impact of one-time costs related to the Kitchener expansion, gross margins for the quarter were 29.8% versus 31.4% in Q2 of the prior year. Continued improvements to product mix coupled with improved pricing mitigated the margin impact of Laker volume declines. EBITDA for the second quarter of fiscal 2016 improved to $1.7 million, and $1.8 million excluding one time costs, compared to $1.6 million in the second quarter of fiscal 2015.

"Our second quarter and year to date results represent another strong performance for Brick Brewing. Industry conditions have been challenging and summer weather through the end of July was disappointing. Pricing pressure from mainstream brands impacted the value category, including our Laker brand. In the face of those headwinds, our results are all the more impressive," noted George Croft, President and CEO. "Our craft premium Waterloo brand delivered volume growth of 37%. Consumers are showing their support for Waterloo, both in our core offerings of Dark, IPA, Pilsner and Amber, as well as our Grapefruit and Lemonade Radlers. Seagram cider posted strong growth as well, with volume more than double prior year. The cool start to the summer negatively impacted the cooler category, including both Seagram malt and vodka based products. Our ability to grow the top line and EBITDA in these difficult conditions is a testament to the strength of our operating model."

During the second quarter, Brick completed the expansion project in Kitchener, incurring $180 thousand in one time expenses. "Overall, the project has gone very much as we expected. We were able to overcome the bulk of the delays and costs associated with mid-winter construction, and the commissioning of the new brewhouse is now complete. We had expected this to take until October, so early completion will allow us to begin to realize the projected cost savings immediately," said Russell Tabata, Chief Operating Officer.

Croft added, "At the half way mark, we're very pleased with where we are. With the new brewhouse complete and set to deliver savings, the strength of our product offering, and the pending expansion into Ontario grocery, we're excited about the second half."

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, 2015.

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, 2015      July 27, 2014   July 26, 2015   July 27, 2014
Net income   $ 580   $ 445   $ 610   $ 239
                         
Add (deduct):                        
  Income tax expense (recovery)     218     163     236     86
  Depreciation and amortization     699     772     1,382     1,537
  Loss on disposal of property, plant and equipment     -     -     -     7
  Share-based payments     34     14     64     63
  Finance costs     123     183     235     304
Subtotal     1,074     1,132     1,917     1,997
                         
EBITDA*     1,654     1,577     2,527     2,236
                         
                         
 
STATEMENTS OF COMPREHENSIVE INCOME
For the quarters ended July 26, 2015 and July 27, 2014
(Not audited or reviewed by the Company's external auditor)
 
 
 
    Quarter ended   Fiscal year-to-date ended
    July 26, 2015   July 27, 2014   July 26, 2015   July 27, 2014
                 
Revenue   $ 11,037,366   $ 10,417,240   $ 18,744,299   $ 17,954,647
Cost of sales     7,932,292     7,142,789     13,547,469     13,040,392
Gross profit     3,105,074     3,274,451     5,196,830     4,914,255
                         
Selling, marketing and administration expenses     2,046,195     2,307,515     3,820,640     4,005,976
Other expenses     137,496     174,965     294,617     271,754
Finance costs     123,630     183,318     235,232     303,761
Loss on disposal of property, plant and equipment     -     -     -     7,345
Income before tax     797,753     608,653     846,341     325,419
                         
Income tax expense     217,947     163,200     235,757     86,755
Net income and comprehensive                        
income for the period   $ 579,806   $ 445,453   $ 610,584   $ 238,664
                         
Basic earnings per share   $ 0.02   $ 0.01   $ 0.02   $ 0.01
Diluted earnings per share   $ 0.02   $ 0.01   $ 0.02   $ 0.01
                         
                         
   
STATEMENTS OF FINANCIAL POSITION  
As at July 26, 2015 and January 31, 2015  
(Not audited or reviewed by the Company's external auditor)  
   
   
    July 26, 2015     January 31, 2015  
ASSETS                
  Non-current assets                
    Property, plant and equipment   $ 18,931,869     $ 15,582,051  
    Intangible assets     15,366,137       15,114,247  
    Deferred income tax assets     1,685,404       1,921,161  
    Construction deposit     2,303,522       1,478,220  
      38,286,932       34,095,679  
  Current assets                
    Cash     -       594,976  
    Accounts receivable     8,700,592       6,492,461  
    Inventories     4,298,362       3,400,821  
    Prepaid expenses     625,120       350,154  
      13,624,074       10,838,412  
TOTAL ASSETS     51,911,006     $ 44,934,091  
                 
LIABILITIES AND EQUITY                
  Equity                
    Share capital     39,333,962       39,413,636  
    Share-based payments reserves     1,122,076       1,075,554  
    Deficit     (5,496,891 )     (6,107,475 )
  TOTAL EQUITY     34,959,147       34,381,715  
                   
  Non-current liabilities                
    Provisions     316,313       307,235  
    Obligation under finance lease     4,265,016       1,266,996  
    Long-term debt     2,105,815       2,642,676  
      6,687,144       4,216,907  
  Current liabilities                
    Bank Indebtedness     1,351,117       -  
    Accounts payable and accrued liabilities     7,001,392       4,665,784  
    Current portion of obligation under finance lease     511,802       46,925  
    Current portion of long-term debt     1,400,404       1,622,760  
      10,264,715       6,335,469  
TOTAL LIABILITIES     16,951,859       10,552,376  
                 
TOTAL LIABILITIES AND EQUITY   $ 51,911,006     $ 44,934,091  
                 
                 
   
STATEMENTS OF CASH FLOWS  
For the quarters ended July 26, 2015 and July 27, 2014  
(Not audited or reviewed by the Company's external auditor)  
   
   
   
    Quarter ended     Fiscal year-to-date ended  
   
    July 26, 2015       July 27, 2014       July 26, 2015       July 27, 2014  
Operating activities                                
  Net income   $ 579,806     $ 445,453     $ 610,584     $ 238,664  
  Adjustments for:                                
    Income tax expense     217,947       163,200       235,757       86,755  
    Finance costs     123,630       183,318       235,232       303,761  
    Depreciation and amortization of property, plant and                                
    equipment and intangibles     699,288       772,003       1,381,972       1,536,530  
    Loss on disposal of property, plant and equipment     -       -       -       7,345  
    Share-based payments     34,395       13,862       63,921       63,186  
    Change in non-cash working capital related to operations     (1,772,396 )     462,719       (1,090,724 )     (1,077,226 )
  Less:                                
    Interest paid     (17,286 )     (169,646 )     (111,133 )     (263,693 )
Cash provided by (used in) operating activities     (134,616 )     1,870,909       1,325,609       895,322  
                                 
Investing activities                                
  Purchase of property, plant and equipment     (766,784 )     (499,024 )     (1,319,445 )     (1,156,712 )
  Construction deposit paid     (205,119 )     -       (825,302 )     -  
  Refund (purchase) of intangible assets     15,737       (159,831 )     (262,090 )     (305,620 )
Cash used in investing activities     (956,166 )     (658,855 )     (2,406,837 )     (1,462,332 )
                                 
Financing activities                                
  Increase (decrease) in bank indebtedness     1,351,117       (1,297,461 )     1,351,117       686,214  
  Repayment of long-term debt     (544,691 )     (239,593 )     (767,793 )     (451,189 )
  Issuance of shares, net of fees     -       -       5,225       6,985  
  Shares repurchased and cancelled, including fees     (83,817 )     -       (102,298 )     -  
  Proceeds from stock option exercise     -       325,000       -       325,000  
Cash provided by (used in) financing activities     722,609       (1,212,054 )     486,251       567,010  
                                 
Net increase/(decrease) in cash     (368,172 )     -       (594,976 )     -  
                                 
Cash, beginning of period     368,172       -       594,976       -  
                                 
Cash, end of period   $ -     $ -     $ -     $ -  
                                 
Non-cash investing and financing activities:                                
                                 
  Acquisition of assets under finance lease   $ 963,093     $ -     $ 3,402,145     $ -  
                                 
                                 

Additional Information

For further details the Company's complete management discussion and analysis (MD&A) and financial statements for the quarter ended July 26, 2015 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 the largest Canadian-owned brewery in Ontario. 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.

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 t he 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