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, 2017 | May 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, 2017 | January 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.
For further information:
Sean Byrne, Chief Financial Officer
(519) 742-2732 Ext. 132
E-mail: info@brickbeer.com