Brick Brewing Reports F2019 First Quarter EBITDA, ex one-time adjustments, of $1.13M

KITCHENER, Ontario, May 31, 2018 (GLOBE NEWSWIRE) --

First Quarter Highlights:

• Unseasonably cold and wet spring drove industry volume down by 6%
  
  
• Net revenue, excluding one-time adjustments of $3.59 million was $10.6 million, from $11.5 million in the prior year
  
  
• The Beer Store ("TBS"), the Company's largest customer, mandated a move from a buy/sell to a consignment-based system resulting in a one-time gross profit decrease of $2.2 million.
  
  
• Selling, Marketing and Administration ("SM&A") expenses were $2.1 million consistent with $2.1 million in the prior year.
  
  
• EBITDA* of $1.13 million excluding one-time adjustments, compared to $2.4 million prior year.

Brick Brewing Co. Limited ("Brick" or the "Company") BRB, Ontario's largest Canadian-owned brewery, today released financial results for the first quarter which ended April 29, 2018. Brick reported EBITDA of $1.13 million on net revenue of $10.6 million, excluding the impact of one-time adjustments. EBITDA was negatively impacted by $0.11 million in one-time warehousing and shunting costs to build inventory related to the can line upgrade and net revenue and EBITDA were negatively impacted by $3.59 million and $2.2 million, respectively, due to the mandated transition by TBS to consignment-based inventory.

George Croft, Brick's President and Chief Executive Officer commented, "Our EBITDA results in the first quarter fell short of our expectations. The overall beer category experienced softness driven by an unseasonably cold and wet spring which drove the industry volume lower by 6%. The beer category also experienced headwinds from increased government taxes and TBS distribution rates, driving a 2% decrease in net revenue during the quarter. Brick's lead brands performed better than the norm, Waterloo family grew 6%, Laker family declined 3%, while our summer-themed brands LandShark and Margaritaville were especially vulnerable to the prolonged winter and decreased by 17%."

"April 2018 saw the completion of the installation of our can line upgrade project – both on time and on budget." commented Russell Tabata, Brick's Chief Operating Officer. "The ramp up of the new can equipment has exceeded our early expectations and, as of the end of the quarter, the new equipment is operating consistently at or above our targeted rates which has effectively doubled the line's capacity. We expect our new can line capability to be the cornerstone of our future success and business growth."

Croft added, "We do not see these results as indicative of our full year performance. We are now entering our peak summer selling period and we are working hard to regain our momentum. With the launch of our new Laker packaging design, our Landshark promotions, our Waterloo seasonal offerings and the exciting Chudleigh's cider launch, we are positioned well for success.  The positive start up of the can line will offer new opportunities for both our owner brands as well as for our co-packing customers. We are now well positioned to compete in the competitive Canadian beer market and to serve our customers for the long term."

Brick's board of directors has also approved a quarterly dividend of $0.02/share. The dividend is payable July 24, 2018 to shareholders of record as of July 10, 2018.

STATEMENTS OF COMPREHENSIVE INCOME 
Quarters ended April 29, 2018 and April 30, 2017

STATEMENTS OF FINANCIAL POSITION
As at April 29, 2018 and January 31, 2018

STATEMENTS OF CASH FLOWS
Quarters ended April 29, 2018 and April 30, 2017

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 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, loss 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