Mr. Peter Byrne reports

RUM REPORTS Q1 2016 CONSOLIDATED FINANCIAL RESULTS

Rocky Mountain Liquor Inc. today released its financial results for the three-month period ending March 31, 2016.

Key operating and financial metrics

Key operational and financial highlights, year-over-year three-month comparison:

• Sales decreased to $9.5-million (2015 -- $10.4-million);
• EBITDA (earnings before interest, taxes, depreciation and amortization) decreased to a loss of $272,079 (2015 -- earnings of $6,224);
• Net loss is $625,324 (2015 -- $320,276);
• Gross margin percentage decreased to 24.1 per cent (2015 -- 25.6 per cent).

Total sales for the three-month period ended March 31, 2016, were $9.5-million. Sales are lower than the same quarter in 2015 by $900,000 due to the closure of one store and the sale of three stores in the prior year. As well, there has also been a slowdown in the economy in Alberta which has affected sales in certain rural markets where energy is the dominant industry.

Margins have decreased from 25.6 per cent to 24.1 per cent as compared with this quarter last year. As the economy worsens in Alberta, consumers have been substituting the products they purchase to lower margin items. The company has altered the marketing and promotional strategies to maintain market share.

On April 1, 2016, the company announced that the holders of its 7.75-per-cent convertible unsecured subordinated debentures due April 30, 2016, approved the proposed amendments to the debentures. As a result, the maturity date will be extended to April 30, 2021, the conversion price will reduce to 25 cents from 50 cents, and the coupon rate will be reduced to 7.5 per cent. The company has also announced its intention to redeem on a pro rata basis 15 per cent of the principal amount of the amended debentures on or about June 10, 2016.

The wildfires in the Fort McMurray area will affect sales in the second quarter. The company's store does not appear to have been physically damaged; however, it remains uncertain as to when it will be able to reopen. The company will continue to support its team members from that area who have been evacuated.

Management will continue to assess individual store performance, and some stores may be sold or closed. Proceeds from any sales will be applied to reduce debt. The company does not intend to curtail investment in enhancements to its industry-leading enterprise resource systems.

Detailed information in the form of the company's audited consolidated financial statements and management's discussion and analysis are available under the company's profile on SEDAR and also on the company's website. After accessing the website, please choose the investor relations tab to view quarterly reports.

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