Questions? +1 (202) 335-3939 Login
Trusted News Since 1995
A service for food industry professionals · Saturday, December 15, 2018 · 471,259,473 Articles · 3+ Million Readers

Brick Brewing Reports Third Quarter EBITDA of $2.8M, +55% from prior year

Third Quarter Highlights:

  • Net revenue for the third quarter increased to $14.2 million compared to $11.7 million in the prior year (+21.3%).
  • Gross profit margins for the quarter increased to 28.1% versus 26.5% in quarter 3 of the prior year.
  • Selling, Marketing and Administration (“SM&A”) of $2.22 million, compared to prior year at $2.24 million.
  • EBITDA* for the quarter increased by $1.0 million or 55% to $2.8 million compared to EBITDA* in the third quarter of fiscal 2017 of $1.8 million, excluding one-time costs.
  • The Board of Directors approved an increase to the quarterly dividend, to $0.025/share, payable January 29, 2019 to shareholders of record as of January 15, 2019. The dividend is classified as an eligible dividend.

Year to Date Highlights:

  • Net revenue increased to $41.3 million, from $39.1 million in the prior year, excluding the impact of The Beer Store’s (“TBS”) consignment-based system (+5.6%).
  • 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.
  • Gross profit margin has rebounded from the first quarter softness to deliver 27.8% versus 28.5% prior year.
  • Selling, Marketing and Administration (“SM&A”) expenses increased slightly to $7.2 million from $7.0 million.
  • EBITDA* improved slightly to $7.25 million year to date, up from $7.23 million in the prior year, excluding one-time costs of TBS consignment-based change.
  • Brick Brewing recently announced its strategic direction to produce cannabis-infused beverages for itself and others in 2019.

KITCHENER, Ontario, Dec. 06, 2018 (GLOBE NEWSWIRE) -- 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 28, 2018.

Net revenues for the third quarter of fiscal 2019 grew to $14.2 million, up from $11.7 million in the third quarter of fiscal 2018. Gross profit margins for the quarter increased to 28.1% versus 26.5% in Q3 of the prior year. Margin expansion was supported by strong pricing, enhanced product mix as well as overall cost reductions in operations. EBITDA for the third quarter of fiscal 2019 improved to $2.8 million, reflecting an acceleration of strong results in fiscal 2019.

“This was a tremendous quarter for Brick Brewing,” noted George Croft, President and CEO. “We’re reporting double digit revenue and EBITDA growth. We’ve been able to expand margins, increase the investment in our brands, and still deliver 55% growth in EBITDA. Our Laker brand posted 4% volume growth and our LandShark brand continued to resonate with consumers and grew 6% in the quarter. Our Waterloo brands declined 8% in the face of craft beer proliferation and strong competitive category pressure.  The Waterloo brand will benefit considerably from our recently announced small batch brewery and taproom where we can showcase our new expertly crafted innovated products. Overall, the beer industry saw a decline of 5.9% versus prior year.  In comparison, our owned beer business grew 2% versus prior year, for the quarterly comparison. We have been successful in growing market share, and the strong response we’ve enjoyed from our consumers has allowed us to outperform the category.”

As a result of the strength in operating and financial performance, Brick is also announcing today a 25% increase in the quarterly dividend, to $0.025/share, up from $0.020/share. The dividend is payable January 29, 2019 to shareholders of record as of January 15, 2019.  “The increase in the dividend is simply a continuation of our commitment to deliver value to shareholders. We believe in our ability to both invest in growing our business while at the same time increasing returns to shareholders,” commented David Birch, Chief Financial Officer.

Croft added, “Although we are pleased with our Q3 results, we will continue to focus on execution and will be working hard to ensure a strong finish for the year.  Additionally, we are excited about our recently announced strategic direction to engage in the new and developing cannabis-infused beverage category and its impact on our future business.”

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, 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) October 28, 2018 October 29, 2017 October 28, 20181 October 29, 2017
         
Net income $    1,025 $   387   $    604 $   2,293  
         
Add (deduct):        
Income tax expense     395     156       233     857  
Depreciation and amortization     1,101     927       3,178     2,650  
Loss on disposal of property, plant and equipment     -     (26 )     251     (26 )
Share-based payments     132     93       334     206  
Finance costs     151     145       348     380  
Subtotal     1,779     1,295       4,344     4,067  
         
EBITDA*     2,804     1,682       4,948     6,360  
         
         

/EIN News/ -- STATEMENTS OF COMPREHENSIVE INCOME
Quarters ended October 28, 2018 and October 29, 2017 

           
     Quarter ended   Fiscal year-to-date ended 
    October 28, 2018 October 29, 2017 October 28, 20181 October 29, 2017
           
Revenue   $    14,169,490 $   11,671,466 $    37,745,557 $   39,055,280
Cost of sales       10,185,405     8,557,904     28,538,993     27,894,803
Gross profit       3,984,085     3,113,562     9,206,564     11,160,477
Selling, marketing and administration expenses       2,224,770     2,238,472     7,153,180     7,047,895
Other expenses       187,763     186,903     616,205     581,850
Finance costs       151,411     145,552     348,484     380,259
Loss on disposal of property, plant and equipment       -      -      251,405     - 
Income before tax       1,420,141     542,635     837,290     3,150,473
Income tax expense       395,281     155,620     233,320     857,022
Net income and comprehensive income    $    1,024,860 $   387,015 $    603,970 $   2,293,451
           
           
Basic earnings per share   $   0.03 $   0.01 $   0.02 $   0.06
Diluted earnings per share   $   0.03 $   0.01 $   0.02 $   0.06
           
           

STATEMENTS OF FINANCIAL POSITION
As at October 28, 2018 and January 31, 2018 

       
    October 28, 2018 January 31, 2018
       
ASSETS      
Non-current assets      
Property, plant and equipment   $    28,847,782   $   27,119,488  
Intangible assets       15,300,407       15,381,578  
Construction deposits       409,025       323,255  
        44,557,214       42,824,321  
       
Current assets      
Cash       1,074,152       -   
Accounts receivable       4,188,773       6,999,212  
Inventories       8,609,220       7,891,364  
Prepaid expenses       1,024,292       613,710  
        14,896,437       15,504,286  
TOTAL ASSETS       59,453,651       58,328,607  
       
LIABILITIES AND EQUITY      
Equity      
Share capital       40,095,357       39,747,525  
Share-based payments reserves       1,190,119       1,026,667  
Deficit       (4,067,748 )     (2,547,746 )
TOTAL EQUITY       37,217,728       38,226,446  
       
Non-current liabilities      
Provisions       546,859       538,376  
Obligation under finance lease       2,414,945       3,011,893  
Long-term debt        7,220,095       6,019,245  
Deferred income tax liability       1,359,784       1,126,464  
        11,541,683       10,695,978  
       
Current liabilities      
Bank indebtedness       -        787,843  
Accounts payable and accrued liabilities       8,278,399       6,516,382  
Current portion of obligation under finance lease       792,186       769,962  
Current portion of long-term debt       1,623,655       1,331,996  
        10,694,240       9,406,183  
TOTAL LIABILITIES       22,235,923       20,102,161  
       
       
TOTAL LIABILITIES AND EQUITY   $    59,453,651   $   58,328,607  
               

STATEMENTS OF CASH FLOWS
Quarters ended October 28, 2018 and October 29, 2017 

           
     Quarter ended   Fiscal year-to-date ended 
     October 28, 2018  October 29, 2017  October 28, 2018   October 29, 2017 
           
Operating activities          
Net income   $    1,024,860   $   387,015   $    603,970   $   2,293,451  
Adjustments for:          
Income tax expense        395,281       155,620       233,320       857,022  
Finance costs       151,411       145,552       348,484       380,259  
Depreciation and amortization of property, plant and
  equipment and intangibles
      1,100,576       927,290       3,178,450       2,650,282  
Loss on disposal of property, plant and equipment       -       (26,418 )     251,405       (26,418 )
Share-based payments       132,083       92,824       334,475       205,784  
Change in non-cash working capital related to operations       (1,875,576 )     2,006,426       3,499,070       (3,403,830 )
Less:          
Interest paid       (145,927 )     (142,232 )     (386,780 )     (342,439 )
Cash provided by operating activities       782,708       3,546,077       8,062,394       2,614,111  
           
Investing activities          
Purchase of property, plant and equipment       (886,648 )     (1,254,226 )     (4,968,523 )     (7,123,641 )
Construction deposit paid       (151,069 )     -       (409,025 )     -   
Proceeds from sale of property, plant and equipment       -       2,566,598       280,000       2,566,598  
Purchase of intangible assets       (23,501 )     (486 )     (65,200 )     (197,551 )
Cash provided by (used in) investing activities       (1,061,218 )     1,311,885       (5,162,748 )     (4,754,594 )
           
Financing activities          
Decrease in bank indebtedness       -       (1,050,335 )     (787,843 )     -  
Issuance of long-term debt       -       -       2,600,000       5,163,067  
Repayment of long-term debt       (419,008 )     (328,338 )     (1,115,763 )     (693,713 )
Repayment of obligation under finance lease       (193,395 )     (186,194 )     (574,724 )     (553,327 )
Dividends paid       (709,363 )     (563,882 )     (2,123,972 )     (1,686,420 )
Issuance of shares, net of fees       -       3,631       -       9,342  
Shares repurchased and cancelled, including fees       -       -       -       (322,629 )
Stock option costs       -       -       (18,510 )     -  
Proceeds from stock option exercise       1,077       -       195,319       125,048  
Cash provided by (used in) financing activities       (1,320,689 )     (2,125,118 )     (1,825,493 )     2,041,368  
           
Net increase/(decrease) in cash       (1,599,200 )     2,732,844       1,074,152       (99,115 )
           
Cash, beginning of the period       2,673,352       -       -       2,831,959  
Cash, end of the period   $    1,074,152   $   2,732,844   $    1,074,152   $   2,732,844  
           

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.

Contact Information
For further information:
David Birch, Chief Financial Officer
(519) 742-2732 Ext.106
E-mail: info@brickbeer.com

brick brewing logo.jpg

Powered by EIN News


EIN Presswire does not exercise editorial control over third-party content provided, uploaded, published, or distributed by users of EIN Presswire. We are a distributor, not a publisher, of 3rd party content. Such content may contain the views, opinions, statements, offers, and other material of the respective users, suppliers, participants, or authors.

Submit your press release