Brick Brewing Reports Third Quarter EBITDA of $1.5M
KITCHENER, ON--(Marketwired - December 10, 2015) -
/EINPresswire.com/ -- Highlights:
- Net Revenue for the third quarter was $9.8 million compared to $9.3 million in the third quarter of fiscal 2015.
- Gross profit margin for the quarter was 25.7% (27.2% excluding 1x costs), compared to 26.6% in prior year.
- Selling, Marketing and Administration ("SM&A") of $1.8 million, down from the prior year at $1.9 million.
- EBITDA* for the quarter increased to $1.5 million ($1.6M excluding one time costs) compared to EBITDA* in the third quarter of fiscal 2015 of $1.4 million.
- The Board of Directors approved introduction of a quarterly dividend, $0.012/share, payable January 15, 2016 to shareholders of record as of January 1, 2016. The dividend is classified as an eligible dividend.
Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), Ontario's largest Canadian-owned brewery, today released results for the third quarter ended October 25, 2015.
Net Revenues for the third quarter of fiscal 2016 grew to $9.8 million, up from $9.3 million in the third quarter of fiscal 2015. Excluding the impact of $147 thousand in one-time costs related to the Kitchener expansion, gross margins for the quarter were 27.2% versus 26.6% in Q3 of the prior year. Continued improvements to product mix coupled with success in cost reduction initiatives mitigated the impact of a soft pricing environment. EBITDA for the third quarter of fiscal 2016 improved to $1.5 million, and $1.6 million excluding one time costs, compared to $1.4 million in the third quarter of fiscal 2015.
"Competitive pricing pressure in the quarter impacted our Laker brand, as international brewers had National brands at deep discount pricing for much of the quarter. Our ability to generate EBITDA growth in this environment is a testament to the strength of our Waterloo craft premium brand, to our diversified business model, and to the investments we've made to ensure we can compete effectively with the large international brewers." noted George Croft, President and CEO. "Our craft premium Waterloo brand grew 37% and is up over 30% year to date. This is prior to introduction of beer into the grocery channel which is expected to arrive on shelves in the next few months. Seagram had a strong quarter as well, with volume up over 7%, led by double digit growth in both vodka based coolers and cider."
During the quarter Brick incurred $147 thousand in one time costs associated with the now complete Kitchener expansion project, bringing year to date one-time costs to $349 thousand. Chief Operating Officer Russell Tabata noted, "The efficiency and performance of the new brewhouse is right in line with our expectations. The improvements we're seeing in energy, materials, and distribution are essential to our ability to compete effectively over the long term."
Given the strong operating and financial performance, Brick is also announcing today the introduction of a quarterly dividend, $0.012/share, payable on January 15 to shareholders of record as of January 1, 2016. The dividend is an eligible dividend. Chief Financial Officer Sean Byrne explained, "Both management and the board felt the time was right to begin to return cash directly to our shareholders. The Company's financial position is strong and our investments in recent years are generating the expected returns. Dividend introduction is entirely in line with our commitment to deliver value to our shareholders."
Croft added, "With a quarter to go, the positive changes in The Beer Store soon to be realized, and the introduction of beer into grocery underway, we feel we are well positioned for a strong finish to the year."
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)*
Fiscal year-to-date
Quarter ended ended
------------------------------------------------
October October October October
(in thousands of dollars) 25, 2015 26, 2014 25, 2015 26, 2014
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Net income $ 492 $ 609 $ 1,102 $ 848
Add (deduct):
Income tax expense 141 164 377 251
Depreciation and
amortization 881 888 2,263 2,424
Gain on disposal of
property, plant and
equipment (197) (446) (197) (439)
Share-based payments 31 29 94 92
Finance costs 122 111 357 415
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Subtotal 978 746 2,894 2,743
EBITDA* 1,470 1,355 3,996 3,591
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STATEMENTS OF COMPREHENSIVE INCOME
For the quarters ended October 25, 2015 and October 26, 2014
(Not audited or reviewed by the Company's external auditor)
Quarter ended Fiscal year-to-date ended
--------------------------------------------------------
October 25, October 26, October 25, October 26,
2015 2014 2015 2014
----------------------------------------------------------------------------
Revenue $ 9,829,613 $ 9,261,324 $ 28,573,912 $ 27,215,971
Cost of sales 7,302,829 6,801,951 20,850,298 19,842,343
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Gross profit 2,526,784 2,459,373 7,723,614 7,373,628
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Selling, marketing
and administration
expenses 1,828,723 1,896,213 5,649,363 5,902,189
Other expenses 140,642 125,385 435,259 397,139
Finance costs 121,779 110,791 357,011 414,552
Gain on disposal of
property, plant and
equipment (196,912) (446,329) (196,912) (438,984)
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Income before tax 632,552 773,313 1,478,893 1,098,732
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Income tax expense 141,082 164,400 376,839 251,155
Net income and
comprehensive
income for the
period $ 491,470 $ 608,913 $ 1,102,054 $ 847,577
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Basic earnings per
share $ 0.01 $ 0.02 $ 0.03 $ 0.02
Diluted earnings per
share $ 0.01 $ 0.02 $ 0.03 $ 0.02
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STATEMENTS OF FINANCIAL POSITION
As at October 25, 2015 and January 31, 2015
(Not audited or reviewed by the Company's external auditor)
October 25, 2015 January 31, 2015
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ASSETS
Non-current assets
Property, plant and equipment $ 21,982,467 $ 15,582,051
Intangible assets 15,376,731 15,114,247
Deferred income tax assets 1,544,322 1,921,161
Construction deposit - 1,478,220
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38,903,520 34,095,679
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Current assets
Cash 390,554 594,976
Accounts receivable 7,606,839 6,492,461
Inventories 3,332,040 3,400,821
Prepaid expenses 455,765 350,154
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11,785,198 10,838,412
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TOTAL ASSETS 50,688,718 $ 44,934,091
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LIABILITIES AND EQUITY
Equity
Share capital 39,263,500 39,413,636
Share-based payments reserves 1,152,366 1,075,554
Deficit (5,005,421) (6,107,475)
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TOTAL EQUITY 35,410,445 34,381,715
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Non-current liabilities
Provisions 320,849 307,235
Obligation under finance lease 4,742,989 1,266,996
Long-term debt 1,751,597 2,642,676
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6,815,435 4,216,907
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Current liabilities
Accounts payable and accrued
liabilities 6,348,935 4,665,784
Current portion of obligation
under finance lease 706,962 46,925
Current portion of long-term
debt 1,406,941 1,622,760
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8,462,838 6,335,469
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TOTAL LIABILITIES 15,278,273 10,552,376
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COMMITMENTS
TOTAL LIABILITIES AND EQUITY $ 50,688,718 $ 44,934,091
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STATEMENTS OF CASH FLOWS
For the quarters ended October 25, 2015 and October 26, 2014
(Not audited or reviewed by the Company's external auditor)
Quarter ended Fiscal year-to-date ended
--------------------------------------------------------
October 25, October 26, October 25, October 26,
2015 2014 2015 2014
----------------------------------------------------------------------------
Operating activities
Net income $ 491,470 $ 608,913 $ 1,102,054 $ 847,577
Adjustments for:
Income tax
expense 141,082 164,400 376,839 251,155
Finance costs 121,779 110,791 357,011 414,552
Depreciation and
amortization of
property, plant
and
equipment and
intangibles 881,271 887,535 2,263,243 2,424,065
Gain on disposal
of property,
plant and
equipment (196,912) (446,329) (196,912) (438,984)
Share-based
payments 30,527 29,167 94,448 92,353
Change in non-
cash working
capital related
to operations 1,681,820 965,214 591,094 (112,012)
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Less:
Interest paid (214,730) (62,036) (325,861) (325,729)
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Cash provided by
operating
activities 2,936,307 2,257,655 4,261,916 3,152,977
Investing activities
Purchase of
property, plant
and equipment (831,658) (291,788) (2,151,101) (1,448,500)
Construction
deposit paid (111,293) - (936,595) -
Proceeds from sale
of property,
plant and
equipment, net 322,490 3,356,397 322,490 3,356,397
Purchase of
intangible assets (15,692) (4,198) (277,784) (309,818)
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Cash provided by
(used in) investing
activities (636,153) 3,060,411 (3,042,990) 1,598,079
Financing activities
Decrease in bank
indebtedness (1,351,117) (2,380,392) - (1,694,178)
Repayment of long-
term debt (355,042) (242,494) (1,122,835) (693,683)
Repayment of
obligation under
finance lease (132,741) (132,741)
Issuance of
shares, net of
fees 4,750 - 9,975 6,985
Shares repurchased
and cancelled,
including fees (76,353) - (178,651) -
Proceeds from
stock option
exercise 904 - 904 325,000
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Cash used in
financing
activities (1,909,599) (2,622,886) (1,423,348) (2,055,876)
Net
increase/(decrease)
in cash 390,554 2,695,180 (204,422) 2,695,180
Cash, beginning of
period - - 594,976 -
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Cash, end of period $ 390,554 $ 2,695,180 $ 390,554 $ 2,695,180
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Non-cash investing
and financing
activities:
Acquisition of
assets under
finance lease $ 805,878 $ 1,040,544 $ 4,208,021 $ 1,040,544
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For further details the Company's complete management discussion and analysis (MD&A) and financial statements for the quarter ended October 25, 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 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 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 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 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:
Sean Byrne
Chief Financial Officer
(519) 742-2732 Ext. 132
E-mail: info@brickbeer.com
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