Mr. Bob Sartor reports

BIG ROCK BREWERY INC. ANNOUNCES FIRST QUARTER FINANCIAL RESULTS

Big Rock Brewery Inc. has released its financial results for the three months ended March 31, 2015.

The corporation reported a net loss of $624,000 for the three months ended March 31, 2015, as compared with a net loss of $310,000 for the same period in 2014. Reported sales volumes decreased 0.4 per cent to 33,980 hectolitres (hl) for the first quarter of 2015 as compared with 34,100 hl for the same period in 2014.

Stronger sales volumes in Alberta for the quarter were overshadowed by results in British Columbia, where sales volumes and revenues were negatively affected by a 742 hl one-time transitional adjustment to inventory upon the corporation's change in status to a domestic producer in that province (as described below). Excluding items related to the transition in the corporation's B.C. business, volumes for the quarter ended March 31, 2015, would have shown an increase of 622 hl (1.8 per cent) and the reported operating loss would have been reduced by $483,000 to $268,000.

With respect to the new Vancouver operations, Bob Sartor, chief executive officer, said: "We held our official launch of Big Rock Urban Brewery and Eatery on April 9 and it was an overwhelming success. We are confident that the great food and the new B.C.-specific beer offerings will result in positive contributions to the bottom line from both the restaurant and the brewery." The first B.C. packaged product, "Hollow Tree Pacific NW Red Ale," hit retail shelves in April.

As for Big Rock's expansions in Ontario, Mr. Sartor commented, "Both the brew pub in Toronto's Liberty Village and the brewery in Etobicoke are progressing through the planning stages and we are excited about the opportunity to participate outside existing distribution systems to increase the number of beers we are able to offer our Ontario consumers."

                     SUMMARY OF RESULTS
      (in thousands of dollars, unless otherwise stated)

                                     Three months ended March 31,
                                            2015            2014

Sales volumes (hl)                        33,980          34,100
Net revenue                           $    7,064      $    7,147
Operating (loss)                            (871)           (420)
Net (loss)                                  (624)           (310)
(Loss) per share                           (0.09)          (0.05)
Per hl net revenue                        207.89          209.59
Per hl cost of sales                      108.98          104.60

The accompanying table shows the effect on Big Rock's results of preoperating costs for the B.C. brewery and brew pub (which commenced commercial operations in April, 2015), together with the effect of the related changeover in warehouse status.

                                     Three months    Excluding effect             Three months 
                             ended March 31, 2015,      of changes to     ended March 31, 2015,            Three months
                                        as stated       B.C. business                 adjusted     ended March 31, 2014

Sales volumes (hl)                         33,980                 742                   34,722                   34,100
Net revenue                            $    7,064           $     188               $    7,252               $    7,147
Cost of sales                               3,703                   -                    3,703                    3,567
Gross profit                                3,361                 188                    3,549                    3,580
Operating expenses                          4,232                (295)                   3,937                    4,000
Operating (loss)                             (871)                483                     (388)                    (420)
Finance expenses and other                    (24)                  -                      (24)                     (42)
(Loss) before income taxes                   (847)                483                     (364)                    (378)
Net (loss)                                   (624)                356                     (268)                    (310)

Big Rock's inventory in British Columbia, prior to March 1, 2015, had "import" status and was thus under the control of the B.C. Liquor Distribution Branch. Subsequent to Big Rock's reclassification to "domestic" status, this inventory reverted to Big Rock's custody. Net preoperating costs associated with the new Vancouver brewery and restaurant, which commenced full commercial operations just after the end of the first quarter, negatively affected general and administrative expenses and operating loss by $295,000.

Financial and operating highlights

• Volume growth occurred in Alberta, Big Rock's largest market, with the launch of several new products, including Birch Bark Canadian Imperial Stout, the Great Cherry Farini cherry kristalweizen and Rock Creek Blackcurrant Cider (together with a new Rock Creek variety pack). Additionally, certain private-label products continued to see strong growth following comprehensive rebranding in 2014.
• In addition to the new products launched in the quarter, Big Rock expects to release two permanent and six limited-edition Calgary-brewed products during the remainder of 2015.
• Big Rock also expects to launch from its new Vancouver brewery four permanent and a variety of seasonal beers brewed specifically for the B.C. market during 2015.

Additional information

The financial statements and related management's discussion and analysis dated May 7, 2015, can be viewed on Big Rock's website and on SEDAR.

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