Press Releases

Brick Brewing Reports Second Quarter EBITDA of $3.3M

Second Quarter Highlights:

  • Net revenue increased to $16.6 million, from $15.9 million in the prior year.
  • Gross margin was 30.9%, compared to 31.1%, prior year, excluding one-time costs.
  • Selling, Marketing and Administration (“SM&A”) expenses were $2.8 million up slightly from $2.7 million prior year.
  • EBITDA* rose to $3.3 million, compared to $3.0 million prior year, excluding one-time costs.
  • The Board of Directors approved the quarterly dividend, $0.02/share, payable October 23, 2018 to shareholders of record as of October 9, 2018. The dividend is classified as an eligible dividend.

First Half Highlights:

  • Net revenue excluding one-time costs was $27.3 million, down slightly from $27.4 million in the prior year.
  • The Beer Store (TBS), the company’s largest customer, moved from buy/sell to consignment-based system resulting in a one-time gross profit decrease of $2.2 million.
  • Selling, Marketing and Administration (“SM&A”) expenses increased slightly, to $4.9 million, vs. $4.8 million prior year.
  • EBITDA* was $4.3 million, down from $4.7 million in the prior year, ex one-time costs.

KITCHENER, Ontario, Sept. 06, 2018 (GLOBE NEWSWIRE) -- Brick Brewing Co. Limited (“Brick” or the “Company”) (TSX: BRB), Ontario’s largest Canadian-owned brewery, today released financial results for the second quarter ended July 29, 2018. Brick reported EBITDA of $3.3 million on net revenue of $16.6 million.

George Croft, Brick President and Chief Executive Officer commented, “We are very pleased with our overall recovery and EBITDA performance in our second quarter. The warm summer weather has been very positive for the beer industry pushing total Ontario beer industry 0.6% higher than the prior year.  Our lead brands performed better than the industry norm.  The Waterloo family grew 4.7%, Laker family 1.9%, and our summer-themed brands LandShark and Margaritaville have shown a growth of 9.6%. Our Landshark in-case promotion along with the packaging redesign of our Laker brand family have shown positive results and have provided a lift to our quarterly volume.”

“Early in the quarter we successfully completed the installation of a new can line filler and pasteurizer which not only doubled our canning capacity but also enhanced our packaging capabilities”, commented Russell Tabata, Brick’s Chief Operating Officer.  “The ramp up and commissioning of this new equipment has been fantastic.  As of the end of July, the new equipment is operating ahead of targeted rates and has delivered additional volume during the critical summer selling season.”

Margins showed positive recovery in the second quarter.  Despite the negative pressure caused by increased taxes and product mix, margins return to +30% level.  “Our second quarter also saw our co-pack revenue grow by 19% to $4.2 million compared to prior year.  Our co-pack business continues to generate incremental cashflow to support the ongoing development of our business,” commented George Croft.

Brick’s board of directors has approved the quarterly dividend at $0.02/share.  The dividend is payable October 23, 2018 to shareholders of record as of October 9, 2018.

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 29, 2018 July 30, 2017   July 29, 2018 July 30, 2017
           
Net income (loss) $    1,430 $   1,120   $    (421 ) $   1,907
           
Add (deduct):          
Income tax expense (recovery)     575     395       (162 )     701
Depreciation and amortization     1,068     906       2,078       1,723
Loss on disposal of property, plant and equipment     -     -       251       -
Share-based payments     120     70       202       113
Finance costs     120     135       197       235
Subtotal     1,883     1,506       2,566       2,772
           
EBITDA*     3,313     2,626       2,145       4,679

 

STATEMENTS OF COMPREHENSIVE INCOME
Quarters ended July 29, 2018 and July 30, 2017

   Quarter ended   Fiscal year-to-date ended 
   July 29, 2018  July 30, 2017  July 29, 2018  July 30, 2017
         
Revenue $    16,564,080 $   15,903,344 $    23,576,067   $   27,383,814
Cost of sales     11,442,470     11,341,500     18,353,588       19,336,899
Gross profit     5,121,610     4,561,844     5,222,479       8,046,915
                   
Selling, marketing and administration expenses     2,810,473     2,691,116     4,928,410       4,809,423
Other expenses     185,855     221,370     428,442       394,947
Finance costs     120,486     134,238     197,073       234,707
Loss on disposal of property, plant and equipment     -      -      251,405       - 
Income before tax     2,004,796     1,515,120     (582,851 )     2,607,838
                   
Income tax expense (recovery)     574,539     395,441     (161,961 )     701,402
Net income and comprehensive
  income (loss)
$    1,430,257 $   1,119,679 $    (420,890 ) $   1,906,436
         
         
Basic earnings (loss) per share $   0.04 $   0.03 $   (0.01 ) $   0.05
Diluted earnings (loss) per share $   0.04 $   0.03 $   (0.01 ) $   0.05

 

STATEMENTS OF FINANCIAL POSITION
As at July 29, 2018 and January 31, 2018

  July 29, 2018 January 31, 2018
     
ASSETS    
Non-current assets    
Property, plant and equipment $    29,029,035   $   27,119,488  
Intangible assets     15,325,842       15,381,578  
Construction deposits     241,695       323,255  
      44,596,572       42,824,321  
     
Current assets    
Cash     2,673,352       -   
Accounts receivable     6,137,616       6,999,212  
Inventories     8,981,740       7,891,364  
Prepaid expenses     739,864       613,710  
      18,532,572       15,504,286  
TOTAL ASSETS     63,129,144       58,328,607  
     
LIABILITIES AND EQUITY    
Equity    
Share capital     40,079,180       39,747,525  
Share-based payments reserves     1,073,136       1,026,667  
Deficit     (4,383,245 )     (2,547,746 )
TOTAL EQUITY     36,769,071       38,226,446  
     
Non-current liabilities    
Provisions     540,183       538,376  
Obligation under finance lease     2,615,818       3,011,893  
Long-term debt      7,627,083       6,019,245  
Deferred income tax liability     964,503       1,126,464  
      11,747,587       10,695,978  
     
Current liabilities    
Bank indebtedness     -        787,843  
Accounts payable and accrued liabilities     12,194,860       6,516,382  
Current portion of obligation under finance lease     784,708       769,962  
Current portion of long-term debt     1,632,918       1,331,996  
      14,612,486       9,406,183  
TOTAL LIABILITIES     26,360,073       20,102,161  
     
     
TOTAL LIABILITIES AND EQUITY $    63,129,144   $   58,328,607  

 

STATEMENTS OF CASH FLOWS
Quarters ended July 29, 2018 and July 30, 2017

   Quarter ended   Fiscal year-to-date ended 
   July 29, 2018  July 30, 2017  July 29, 2018   July 30, 2017 
         
Operating activities        
Net income $    1,430,257   $   1,119,679   $    (420,890 ) $   1,906,436  
Adjustments for:        
Income tax expense (recovery)     574,539       395,441       (161,961 )     701,402  
Finance costs     120,486       134,238       197,073       234,707  
Depreciation and amortization of property, plant and equipment and intangibles     1,067,788       906,393       2,077,874       1,722,993  
Loss on disposal of property, plant and equipment     -       -       251,405       -   
Share-based payments     119,725       69,856       202,392       112,960  
Change in non-cash working capital related to operations     1,817,705       (2,685,301 )     5,374,646       (5,400,606 )
Less:        
Interest paid     (124,424 )     (102,106 )     (240,853 )     (209,857 )
Cash provided by (used in) operating activities     5,006,076       (161,800 )     7,279,686       (931,965 )
         
Investing activities        
Purchase of property, plant and equipment     (868,060 )     (2,873,520 )     (2,710,939 )     (5,869,415 )
Construction deposit paid     (166,353 )     -       (1,628,892 )     -   
Proceeds from sale of property, plant and equipment     -       -       280,000       -   
Purchase of intangible assets     (37,220 )     (6,915 )     (41,699 )     (197,065 )
Cash used in investing activities     (1,071,633 )     (2,880,435 )     (4,101,530 )     (6,066,480 )
         
Financing activities        
Increase (decrease) in bank indebtedness     (2,086,280 )     1,050,335       (787,843 )     1,050,335  
Issuance of long-term debt     2,600,000       3,163,067       2,600,000       5,163,067  
Repayment of long-term debt     (362,876 )     (181,614 )     (696,755 )     (365,375 )
Repayment of obligation under finance lease     (191,568 )     (184,438 )     (381,329 )     (367,133 )
Dividends paid     (1,414,609 )     (1,122,538 )     (1,414,609 )     (1,122,538 )
Issuance of shares, net of fees     -       538       -       5,711  
Shares repurchased and cancelled, including fees     -       -       -       (322,629 )
Stock option costs     -       -       (18,510 )     -  
Proceeds from stock option exercise     194,242       60,274       194,242       125,048  
Cash provided by (used in) financing activities     (1,261,091 )     2,785,624       (504,804 )     4,166,486  
         
Net increase/(decrease) in cash     2,673,352       (256,611 )     2,673,352       (2,831,959 )
         
Cash, beginning of the period     -       256,611       -       2,831,959  
Cash, end of the period $    2,673,352   $   -   $    2,673,352   $   -  


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, loss 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