Mr. Robert Sartor reports

BIG ROCK BREWERY INC. ANNOUNCES THIRD QUARTER FINANCIAL RESULTS

Big Rock Brewery Inc. has released its financial results today for the three and nine months ended Sept. 30, 2014.

The corporation reported a net income of $764,000 and $730,000 for the three and nine months ended Sept. 30, 2014, respectively, as compared with net income of $1,217,000 and $2,678,000 for the same periods in 2013. These results are attributed to a reduction in sales volumes. Reported sales volumes decreased 7.2 per cent to 48,376 hectolitres (hl) for the third quarter of 2014 as compared with 52,110 hl for the same quarter of 2014. Sales volumes decreased 11.3 per cent to 129,074 hl for the nine months ended Sept. 30, 2014, compared with 145,475 hl for the same nine-month period in 2013. Excluding the impact of the discontinuance of certain products and the discontinuance or delayed introduction of certain package configurations, the volume decrease for the three and nine months ended Sept. 30, 2014, would be 2,181 hl (4.3 per cent) and 12,117 hl (8.6 per cent), respectively.

"Our limited release product introductions are gaining traction and beginning to mitigate the impact of continuing competition in the crowded craft beer market in Alberta," said Bob Sartor, chief executive officer. "We are on track to begin replacing previously discontinued full-time beers with better, higher-margin offerings. The first of these will make its appearance in the fourth quarter of 2014. These new product introductions will help drive sales in the competitive Alberta market.

"We expect to commence brewing operations in our new Vancouver brewery by December and we are excited to begin releasing full-time and seasonal beers brewed in British Columbia specifically for that market in January, 2015. We have also announced a brewpub to be located in Toronto's vibrant Liberty Village neighbourhood, where we intend that next year we can start to showcase and share our innovation through existing and new Ontario-specific beers."

Financial and operating highlights

• Volume growth occurred in premium-priced brands, including Big Rock's summer Brewmaster's Edition beer, Rhine Stone Cowboy Kolsch-style Ale, which ended its limited run in September, and Purple Gas, a summer seasonal offering.
• The corporation released six limited edition beers and two limited edition ciders in the third quarter (for a total of 17 products in the first nine months of 2014) and expects to release one permanent and nine limited edition products during the fourth quarter of 2014.
• Operating expenses for the three months ended Sept. 30, 2014, were lower than the same period in 2013 due reduced marketing costs and lower share-based compensation expenses.

Additional information

The financial statements and management's discussion and analysis dated Nov. 6, 2014, can be viewed on Big Rock's website and SEDAR.

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