Market Overview

Brick Brewing Reports First Quarter F2018 EBITDA of $2.1M

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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
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