Market Overview

Brick Brewing Reports Second Quarter EBITDA, ex one-time costs, of $3.0M

Share:

Second Quarter Highlights:

  • Net revenue increased to $15.9 million, from $14.0 million in the prior year.
  • Gross margin was 28.7%, and 31.1% excluding one-time costs, compared to 37% prior year.
  • Selling, Marketing and Administration ("SM&A") expenses were flat with prior year, at $2.7 million.
  • EBITDA* of $2.6 million, and $3.0 million excluding one-time cost, compared to $3.1 million prior year.
  • The Board of Directors re-affirmed the quarterly dividend, $0.016/share, payable October 24, 2017 to shareholders of record as of October 10, 2017. The dividend is classified as an eligible dividend.

First Half Highlights:

  • Net revenue increased to $27.4 million, from $23.5 million in the prior year.
  • Gross margin was 29.4%, and 31.9% ex one-time costs, compared to 36.2% prior year.
  • Selling, Marketing and Administration ("SM&A") expenses increased slightly, to $4.8 million, vs. $4.6 million prior year.
  • EBITDA* was $4.7 million and $5.4 million ex one-time cost, up from $5.0 million in the prior year.

KITCHENER, Ontario, Sept. 08, 2017 (GLOBE NEWSWIRE) -- Brick Brewing Co. Limited ("Brick" or the "Company") (TSX:BRB), Ontario's largest Canadian-owned brewery, today released financial results for the second quarter ended July 30, 2017. Brick reported EBITDA, excluding one-time costs, of $3.0 million on net revenue of $15.9 million.

"Recent months have been characterized by cool, wet weather, which served to push total Ontario beer volume 8% lower vs. prior year. Against that backdrop, our ability to grow our branded volume is noteworthy. Laker achieved 8% volume growth in the quarter, while Waterloo was up 16%. The LandShark® and Margaritaville® family grew 29%, with the Margaritaville® cooler launch in the LCBO very well received by consumers," noted George Croft, Brick's President and Chief Executive Officer.

Margins were pressured in the quarter due to increases in fees at The Beer Store, federal excise and Ontario beer tax, as well as product mix, with a shift in mix towards co-pack volumes. "Co-pack is a key part of our business model," commented Russell Tabata, Brick's Chief Operating Officer. "Co-pack volume allows us to utilize available capacity to generate incremental returns, as well as serving to diversify the business model." Co-pack revenue in the quarter grew by 24%, to $3.2 million.

During the quarter Brick recorded one-time cost of $381 thousand ($700 thousand year-to-date). These costs are associated with the Formosa exit, primarily severance costs.

Brick's board of directors has also re-affirmed the quarterly dividend, at $0.016/share.  The dividend is payable October 24, 2017 to shareholders of record as of October 10, 2017.

Croft added, "With the recent completion of the Kitchener expansion project, we are now able to realize the optimum operating footprint – a single source, highly efficient facility with full capabilities. The project was completed on time and on budget. The expansion coupled with the move from two sites to one will generate annual recurring savings of $600 thousand.  In addition, the sale of the Formosa facility was finalized and the transaction closed on September 6, 2017.  The strength of our brands, the diversity we enjoy as a result of our co-pack business, along with the optimized footprint positions us well to compete in the future. We are committed to continuing to grow our business. This is our priority in the second half of fiscal 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) July 30, 2017 July 31, 2016 July 30, 2017 July 31, 2016    
             
Net income $    1,120 $   1,635 $    1,907 $   2,423    
             
Add (deduct):            
Income tax expense     395     438     701     776    
Depreciation and amortization     906     820     1,723     1,486    
Share-based payments     70     34     113     61    
Finance costs     135     164     235     283    
Subtotal     1,506     1,456     2,772     2,606    
             
EBITDA*     2,626     3,091     4,679     5,029    
             

STATEMENTS OF COMPREHENSIVE INCOME
Quarters ended July 30, 2017 and July 31, 2016

   Quarter ended   Fiscal year-to-date ended 
   July 30, 2017  July 31, 2016  July 30, 2017  July 31, 2016
         
Revenue $    15,903,344 $   14,010,744 $    27,383,814 $   23,530,678
Cost of sales      11,341,500     8,826,721     19,336,899     15,014,453
Gross profit     4,561,844     5,184,023     8,046,915     8,516,225
                 
Selling, marketing and administration expenses     2,691,116     2,708,217     4,809,423     4,589,419
Other expenses     221,370     238,980     394,947     445,400
Finance costs     134,238     164,190     234,707     282,552
Income before tax     1,515,120     2,072,636     2,607,838     3,198,854
                 
Income tax expense     395,441     438,000     701,402     775,865
Net income and comprehensive
  income 
$    1,119,679 $   1,634,636 $    1,906,436 $   2,422,989
         
         
Basic earnings per share $   0.03 $   0.05 $   0.05 $   0.07
Diluted earnings per share $   0.03 $   0.05 $   0.05 $   0.07
         

STATEMENTS OF FINANCIAL POSITION
As at July 30, 2017 and January 31, 2017 

  July 30, 2017   January 31, 2017
   
View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com