Market Overview

Brick Brewing Reports Third Quarter EBITDA, ex one-time costs, of $1.8M

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Third Quarter Highlights:

  • Net revenue increased to $11.7 million, from $11.1 million in the prior year.

  • Gross margin fell to 26.7%, and 28.1% excluding one-time costs, compared to 34.2% prior year.

  • Selling, Marketing and Administration ("SM&A") expenses were $2.2 million down slightly from $2.3 million in the prior year.

  • EBITDA* of $1.7 million, and $1.8 million excluding one-time cost, compared to $2.0 million prior year.

  • The Board of Directors approved in increase to the quarterly dividend, to $0.02/share, payable January 23, 2018 to shareholders of record as of January 9, 2018. The dividend is classified as an eligible dividend.

Year to Date Highlights:

  • Net revenue increased to $39.1 million, from $34.6 million in the prior year.

  • Gross margin was 28.6%, and 30.8% ex one-time costs, compared to 35.5% prior year.

  • Selling, Marketing and Administration ("SM&A") expenses increased slightly, to $7.0 million, vs. $6.9 million prior year.

  • EBITDA* was $6.4 million and $7.2 million ex one-time cost, compared to $7.1 million in the prior year.

KITCHENER, Ontario, Dec. 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 third quarter ended October 29, 2017. Brick reported EBITDA excluding one-time costs of $1.8 million on net revenue of $11.7 million.

George Croft, Brick President and Chief Executive Officer commented, "While we are pleased with the market performance of our brands, it is clear that our margin and EBITDA results in the third quarter fell short. Commercially, the beer category was challenged by a cool, wet summer, one which drove industry volume lower. Despite the category volume declines, Laker grew 4% in the quarter, Waterloo was up 9%. The LandShark and Margaritaville family grew 27%, so the consumer facing result is positive. That said, internally, we faced some operating challenges in Q3."

"Early in the quarter we completed as planned the installation of capital equipment associated with our Kitchener expansion and final phase of our supply chain consolidation project," commented Russell Tabata, Brick's Chief Operating Officer.  "The ramp up and commissioning of this equipment and the transition of production from our Formosa facility took until the end of Q3 to complete successfully.  As of the end of October, the new equipment is operating consistently at our targeted rates and we fully expect the operating performance of the facility to return to traditional performance and cost levels moving forward."

Brick's board of directors has also approved an increase to the quarterly dividend, to $0.02/share.  The dividend is payable January 23, 2018 to shareholders of record as of January 9, 2018.

Croft added, "Now that we have the Kitchener brewery operating at targeted levels and have fully consolidated our supply chain footprint, we are working hard to bring the year to a strong finish in the fourth quarter.  Our single source operating facility provides us with the optimal supply chain structure and we are on track to deliver the $600 thousand in annual cost savings related to this project and a return to historic margin levels.  We are now well positioned to compete in the competitive Canadian beer market and to serve our customers for the long term."

   
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 29, 2017 October 30, 2016 October 29, 2017 October 30, 2016  
           
Net income $    387   $   854 $    2,293   $   3,277  
           
Add (deduct):          
Income tax expense     156       291     857       1,067  
Depreciation and amortization     927       753     2,650       2,240  
Gain on disposal of property, plant and equipment     (26 )     -     (26 )     -  
Share-based payments     93       44     206       105  
Finance costs     145       103     380       386  
Subtotal     1,295       1,191     4,067       3,798  
           
EBITDA*     1,682       2,045     6,360       7,075  
           

 

STATEMENTS OF COMPREHENSIVE INCOME
Quarters ended October 29, 2017 and October 30, 2016

           
   Quarter ended   Fiscal year-to-date ended   
   October 29, 2017  October 30, 2016  October 29, 2017  October 30, 2016  
           
Revenue $    11,671,466 $   11,106,289 $    39,055,280 $   34,636,967  
Cost of sales     8,557,904     7,302,657     27,894,803     22,317,110  
Gross profit     3,113,562     3,803,632     11,160,477     12,319,857  
Selling, marketing and administration expenses     2,238,472     2,349,468     7,047,895     6,938,887  
Other expenses     186,903     205,192     581,850     650,592  
Finance costs     145,552     103,043     380,259     385,595  
Income before tax     542,635     1,145,929     3,150,473     4,344,783  
Income tax expense     155,620     291,495     857,022     1,067,360  
Net income and comprehensive income  $    387,015 $   854,434 $    2,293,451 $   3,277,423  
           
           
Basic earnings per share $   0.01 $   0.02 $   0.06 $   0.09  
Diluted earnings per share $   0.01 $   0.02
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