Brick Brewing Delivers Strong Third Quarter Growth, Net Sales up 27%, EBITDA of $1.9M vs. $0.4M Prior Year
Third Quarter F2014 Highlights:
- Net Revenues for the third quarter of fiscal 2014 were $9.6 million compared to $7.5 million in the third quarter of fiscal 2013.
- Gross profit margin for the quarter increased to 31.6% from 18.7% in Q3 of fiscal 2013. Gross margin percentage improvement is driven by improved pricing, favorable product mix, cost control efforts, and overall efficiency on increasing volumes. Prior year Q3 was negatively impacted by a one-time supply chain disruption, impacting co-pack volume.
- Selling, Marketing and Administration ("SM&A") expenses increased nominally, to $1.8 million from $1.7 million in the prior year, driven by brand support for Waterloo, Seagram and Laker.
- EBITDA* for the third quarter of fiscal 2014 increased to $1.9 million compared to EBITDA* in the third quarter of fiscal 2013 of $0.4 million.
KITCHENER, ON, Dec. 12, 2013 /CNW/ - Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), the largest Canadian-owned and Canadian-based publicly held brewery in Ontario, today released financial results for the third quarter of its 2014 fiscal year. Net revenues of $9.6 million for the third quarter represented 27% growth versus the previous year. EBITDA for the third quarter of $1.9 million was up from $0.4 million last year.
The Company continued to invest in its core supported brands and achieved double-digit volume improvement in the third quarter. Within the above premium craft portfolio, Waterloo volumes increased 29%. Seagram cooler and cider volumes increased by 51% as consumers continue to look for more natural quality offerings. Laker volumes in the quarter improved versus year ago driven by aggressive promotional activity in the second quarter. Additionally, the quarter benefited from strong year-over-year improvement in co-pack production.
Brick Brewing's President and Chief Executive Officer George Croft said, "Overall, we're very pleased with the results we're reporting today. In an environment where the overall beer category volume was largely flat in the third quarter, we've been able to show growth in our supported brands while also significantly improving our EBITDA performance. This is a testament to our focus on the category segments with higher growth and margin - premium craft beer as well as coolers and ciders. We did experience volatility in our earnings from second to third quarter, the result of the timing of our brand support activities. Moving forward, we would expect to return to more normalized quarterly performance. We continue to focus on execution, cost control and improved efficiency, all of which were central to the results we're reporting."
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, 2013.
| Reconciliation of Net Earnings to Earnings Before Interest, Taxes, Depreciation and Amortization, Gain/Loss on Disposal of Property, Plant and Equipment, and Share Based Payments (EBITDA)* |
|||||||||
| Quarter ended | Fiscal year-to-date ended | ||||||||
| (in thousands of dollars) | October 27, 2013 | October 28, 2012 | October 27, 2013 | October 28, 2012 | |||||
| Net income (loss) | $ | 683 | $ | (416) | $ | 280 | $ | 1,038 | |
| Add (deduct): | |||||||||
| Income tax expense (recovery) | 227 | (95) | 89 | 421 | |||||
| Depreciation and amortization | 789 | 678 | 2,272 | 1,940 | |||||
| Gain on disposal of property, plant and equipment | - | - | (15) | - | |||||
| Share based payment | 45 | 68 | 146 | 143 | |||||
| Finance costs | 148 | 151 | 475 | 426 | |||||
| Subtotal | 1,209 | 802 | 2,967 | 2,930 | |||||
| EBITDA* | 1,892 | 386 | 3,247 | 3,968 | |||||
| STATEMENTS OF COMPREHENSIVE INCOME For the periods ended October 27, 2013 and October 28, 2012 (Not audited or reviewed by the Company's external auditor) |
||||||||||
| Quarter ended | Fiscal year-to-date ended | |||||||||
| October 27, 2013 | October 28, 2012 | October 27, 2013 | October 28, 2012 | |||||||
| Revenue | $ | 9,561,744 | $ | 7,539,336 | $ | 29,718,744 | $ | 27,652,162 | ||
| Cost of sales | 6,537,642 | 6,129,816 | 21,947,508 | 20,208,953 | ||||||
| Gross profit | 3,024,102 | 1,409,520 | 7,771,236 | 7,443,209 | ||||||
| Selling, marketing and administration expenses | 1,771,749 | 1,665,282 | 6,433,112 | 5,239,298 | ||||||
| Other expenses | 194,208 | 103,835 | 494,091 | 318,686 | ||||||
| Finance costs | 147,882 | 151,470 | 474,812 | 426,395 | ||||||
| Income (loss) before tax | 910,263 | (511,067) | 369,221 | 1,458,830 | ||||||
| Income tax expense (recovery) | 227,000 | (94,815) | 89,000 | 421,142 | ||||||
| Net income (loss) and comprehensive |
||||||||||
| income (loss) for the period | $ | 683,263 | $ | (416,252) | $ | 280,221 | $ | 1,037,688 | ||
| Basic earnings (loss) per share | $ | 0.02 | $ | (0.01) | $ | 0.01 | $ | 0.04 | ||
| Diluted earnings (loss) per share | $ | 0.02 | $ | (0.01) | $ | 0.01 | $ | 0.03 | ||
| STATEMENTS OF FINANCIAL POSITION As at October 27, 2013 and January 31, 2013 (Not audited or reviewed by the Company's external auditor) |
||||||
| |
October 27, 2013 | |
January 31, 2013 | |||
| ASSETS | ||||||
| Non-current assets | ||||||
| Property, plant and equipment | $ | 19,109,013 | $ | 19,109,603 | ||
| Intangible assets | 14,515,467 | 14,259,612 | ||||
| Other assets | 30,000 | 25,000 | ||||
| Deferred income tax assets | 2,444,925 | 2,533,925 | ||||
| 36,099,405 | 35,928,140 | |||||
| Current assets | ||||||
| Accounts receivable | 6,908,710 | 5,187,785 | ||||
| Inventories | 4,236,101 | 4,013,375 | ||||
| Prepaid expenses | 296,950 | 296,180 | ||||
| 11,441,761 | 9,497,340 | |||||
| TOTAL ASSETS | 47,541,166 | 45,425,480 | ||||
| LIABILITIES AND EQUITY | ||||||
| Equity | ||||||
| Share capital | 38,941,465 | 35,895,873 | ||||
| Share-based payments reserves | 1,012,286 | 1,092,414 | ||||
| Deficit | (7,115,522) | (7,395,743) | ||||
| TOTAL EQUITY | 32,838,229 | 29,592,544 | ||||
| Non-current liabilities | ||||||
| Provisions | 340,676 | 326,646 | ||||
| Long-term debt and promissory note | 4,892,526 | 6,078,719 | ||||
| 5,233,202 | 6,405,365 | |||||
| Current liabilities | ||||||
| Bank indebtedness | 1,934,615 | 2,310,809 | ||||
| Accounts payable and accrued liabilities | 5,620,514 | 5,461,292 | ||||
| Current portion of long-term debt and promissory note | 1,914,606 | 1,655,470 | ||||
| 9,469,735 | 9,427,571 | |||||
| TOTAL LIABILITIES | 14,702,937 | 15,832,936 | ||||
| COMMITMENTS | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 47,541,166 | $ | 45,425,480 | ||
| STATEMENTS OF CASH FLOWS For the periods ended October 27, 2013 and October 28, 2012 (Not audited or reviewed by the Company's external auditor) |
|||||||||||
| Quarter ended | Fiscal year-to-date ended | ||||||||||
| October 27, 2013 | October 28, 2012 | October 27, 2013 | October 28, 2012 | ||||||||
| Operating activities | |||||||||||
| Net income (loss) | $ | 683,263 | $ | (416,252) | $ | 280,221 | $ | 1,037,688 | |||
| Adjustments for: | |||||||||||
| Income tax expense (recovery) | 227,000 | (94,815) | 89,000 | 421,142 | |||||||
| Finance costs | 147,882 | 151,470 | 474,812 | 426,395 | |||||||
| Depreciation and amortization of property, plant and equipment and intangibles |
789,426 | 677,846 | 2,271,642 | 1,940,322 | |||||||
| Loss (gain) on disposal of property, plant and equipment | - | - | (15,093) | - | |||||||
| Share-based payments | 44,538 | 68,864 | 146,341 | 142,129 | |||||||
| Change in non-cash working capital related to operations | (1,699,060) | 458,587 | (1,835,966) | (1,761,530) | |||||||
| Less: | |||||||||||
| Interest paid | (128,579) | (115,799) | (403,742) | (349,803) | |||||||
| Cash provided by operating activities | 64,469 | 728,915 | 1,007,215 | 1,856,343 | |||||||
| Investing activities | |||||||||||
| Purchase of property, plant and equipment | (478,855) | (697,670) | (2,452,931) | (1,862,571) | |||||||
| Proceeds from sale of property, plant and equipment | - | - | 203,000 | - | |||||||
| Purchase of intangible assets | (1,447) | (225) | (261,883) | (254,163) | |||||||
| Cash used in investing activities | (480,302) | (697,895) | (2,511,814) | (2,116,734) | |||||||
| Financing activities | |||||||||||
| Increase/(decrease) in bank indebtedness | 1,934,615 | (136,279) | (379,599) | 580,276 | |||||||
| Decrease in obligation under financial lease | - | (6,166) | - | (16,398) | |||||||
| Issuance of long-term debt | - | 321,884 | 1,185,912 | 321,884 | |||||||
| Repayment of long-term debt | (1,609,806) | (210,459) | (2,120,837) | (627,746) | |||||||
| Change in share capital | - | - | - | 2,375 | |||||||
| Proceeds from warrants | - | - | 2,827,615 | - | |||||||
| Share issue costs paid | (12,388) | - | (25,502) | - | |||||||
| Issurance of shares | 810 | - | 17,010 | - | |||||||
| Cash provided by/(used in) financing activities | 313,231 | (31,020) | 1,504,599 | 260,391 | |||||||
| Net increase/(decrease) in cash | (102,602) | - | - | - | |||||||
| Cash, beginning of period | 102,602 | - | - | - | |||||||
| Cash, end of period | $ | - | $ | - | $ | - | $ | - | |||
Additional Information
For further details the Company's complete management discussion and analysis (MD&A) and financial statements for the quarter ended October 27, 2013 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 Ontario's largest Canadian-owned and Canadian-based publicly held brewery. 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.
* 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.
SOURCE: Brick Brewing Co. Limited
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