Brick Brewing reports solid Q1 with EBITDA of $1M

KITCHENER, ON, June 6, 2013 /CNW/ - Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), today released its financial results for the first quarter ended April 28, 2013 for its fiscal year 2014. Net revenue for the first quarter was $8.8 million up from $8.6M in the first quarter of the last fiscal year. Gross margin for the quarter improved to 26.3% from 25.8% during the same period last year.

"A winter that was longer and colder than last year resulted in overall sales declines for the beer industry in the first quarter of over 5%, yet Brick's overall volume was up 5.7%" stated George Croft, President and CEO Brick Brewing. "Despite the negative trend for the industry our Waterloo Brewing Co. family of premium craft beer was up 75%, Seagram coolers and ciders were up 11.3% and our co-pack business increased by 35.7%. Significant price discounting of nationally supported mainstream competitive beer brands reduced our Laker volume by 7.7% which was more than offset by the more profitable balance of our portfolio."

"We made a choice to increase our brand building marketing investment in support of our core Seagram, Waterloo Brewing Co. and Laker businesses driving SM&A up by 26% versus this period last year" continued George Croft. "We have some outstanding new products especially within our Seagram and Waterloo brands. That increased marketing support reduced our EBITDA this quarter to $1.0 million however we exceeded our internal EBITDA target. We plan for this increased support to generate increased consumer demand in Q2 and sustain demand through the balance of the year."

Brick Brewing produced considerable news and innovation in its first quarter by launching a new Pilsner and Small Batch Brews seasonal mix pack from Waterloo Brewing Co; a cider mix pack comprised of Seagram apple, pear and amber ciders is now uniquely available at the LCBO; Seagram 80 Blood Orange and Black Cherry are the only low-calorie, naturally sweetened coolers available at the LCBO; and Seagram Classic Lemonade is available at the LCBO. We also extended our promotion of a free, bonus tall-can in 12 and 24-bottle packs of Laker. "We like our position, and look forward to continued strong performance heading into the key summer months." added Mr. Croft.

Financial highlights are as follows:

• Net revenues for the first quarter of fiscal 2014 were $8.8 million compared to $8.6 million in the first quarter of fiscal 2013.
• Gross profit percentage for the quarter expanded to 26.3% from 25.8% in the prior year comparable quarter.
• Selling, Marketing and Administration ("SM&A") expenses increased to $1.9 million from $1.5 million in the prior year, driven by marketing spend to support Laker, Waterloo and Seagram brands.
• EBITDA* for the first quarter of fiscal 2014 decreased to $1.0 million compared to EBITDA* in the first quarter of fiscal 2013 of $1.2 million.

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 on Disposal of Property, Plant and Equipment, and Share Based Payments (EBITDA)*

STATEMENTS OF COMPREHENSIVE INCOME
For the periods ended April 28, 2013 and April 29, 2012
(Not audited or reviewed by the Company's external auditor)

STATEMENTS OF FINANCIAL POSITION
As at April 28, 2013 and January 31, 2013
(Not audited or reviewed by the Company's external auditor)

STATEMENTS OF CASH FLOWS
For the periods ended April 28, 2013 and April 29, 2012
(Not audited or reviewed by the Company's external auditor)

Additional Information

For further details the Company's complete management discussion and analysis (MD&A) and financial statements for the quarter ended April 28, 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.

Forward-Looking Statements

Except for the historical information contained herein, the discussion in this press release contains certain forward-looking statements that involve risks and uncertainties, such as statements of the Company's plans, objectives, strategies, expectations and intentions and include, for example, the statements concerning expected volumes, demand, operating efficiencies and costs.  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.  These forward-looking statements are not guarantees and reflect the Company's views as of June 5, 2013 with respect to future events.  Future events 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, including the statements regarding expected volumes, demand, operating efficiencies and costs are based on, among other things, the following material factors and assumptions: sales volumes in the fiscal year ending January 31, 2014 ("fiscal 2014") will increase; no material changes in consumer preferences; brewing, blending, and packaging efficiencies will improve; the cost of input materials for brewing and blending will increase; the cost of packaging materials will decrease; competitive activity from other manufacturers will continue; no material change to the regulatory environment in which the Company operates and no material supply, cost or quality control issues with vendors.   Readers are urged to consider the foregoing factors and assumptions when reading the forward-looking statements and, for more information regarding the risks, uncertainties and assumptions that could cause the Company's actual financial results to differ from the forward-looking statements, to also refer to the remainder of the discussion in this press release, the Company's annual information form and various other public filings as and when released by the Company.  The forward-looking statements included in this press release are made only as of June 5, 2013 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 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