Mr. Robert Sartor reports

BIG ROCK BREWERY INC. ANNOUNCES THIRD QUARTER FINANCIAL RESULTS

Big Rock Brewery Inc. is releasing its financial results for the three and nine months ended Sept. 30, 2015.

The corporation reported an increase in sales volumes of 14 per cent to 55,132 hectolitres for the third quarter of 2015, as compared with 48,376 hectolitres for the same period in 2014. The reported operating profit was $104,000 for the three months ended Sept. 30, 2015, compared with $1,017,000 for the same period in 2014, while net income was $76,000 for the third quarter of 2015, as compared with $764,000 for the third quarter in 2014.

In Alberta, Big Rock's principal market and the region subject to the fiercest competition, Big Rock grew volumes and gross profit, while at the same time keeping selling expenses below the same periods in 2014. Recently rebranded and relaunched products, including AGD, Big Rock's most approachable lager, continued to see an enthusiastic response from consumers. These products are in the value-priced category and, as a result, per-hectolitre margins were compressed.

Margins in Alberta remain under sustained pressure. A 27.5-per-cent increase in Alberta Gaming and Liquor Commission (AGLC) markup rates early in the year increased beer costs to consumers and hampered Big Rock's ability to implement a planned price increase to cover rising input costs. The corporation has not introduced a general price increase in Alberta since November, 2012. In October, AGLC introduced another change in markup rates. The immediate effect of this change was a partial rollback of the previous increase applicable to Big Rock, but the longer-term effect is still being assessed by the corporation.

In Vancouver, Big Rock Urban, the corporation's newest brew pub and brewery operation, has been well received by local craft consumers. Chief executive officer Robert Sartor remarked: "It's absolutely critical to the success of our new regional ventures that they resonate with the craft community. Winning two awards at the recent B.C. Beer Awards, including first place in the amber/brown ale category for Hollow Tree and being named one of the best new craft breweries by the Georgia Straight, show that we are on the right path. Now we can build on this initial success, grow our stable of B.C.-made beers and start translating consumer satisfaction into positive cash flow." As Big Rock Urban is still developing its beer portfolio, it is not yet selling at full capacity, and therefore has a higher per-unit cost of sales, and higher selling and marketing costs to increase awareness. Additionally, the B.C. market has also embraced the relaunch of AGD, which has contributed toward strong sales volumes but has reduced average margins.

Big Rock's Ontario expansions continue to progress through the initial planning and prepermitting stages. Sales volumes grew in Ontario as the corporation engaged in awareness-building promotional activity, including pop-up parties at the site of the new brew pub. This promotional activity did have a negative impact on current period results for the region.

                                   SUMMARY OF RESULTS
            (in thousands of dollars, except hectolitre and per-hectolitre amounts)

                                     Three months ended Sept. 30,  Nine months ended Sept. 30,
                                            2015            2014         2015            2014        

Sales volumes (hl)                        55,132          48,376      139,164         129,074
Net revenue                             $ 11,834        $ 10,556     $ 29,952        $ 28,117
Operating profit (loss)                      104           1,017       (1,091)            939
Net income (loss)                             76             764       (1,021)            730
Per-hectolitre net revenue              $ 214.65        $  218.21    $ 215.23        $ 217.84
Per-hectolitre cost of sales            $ 120.11        $  109.70    $ 119.54        $ 109.65

Financial and operating highlights:

• Volume growth occurred in Big Rock's two largest markets, Alberta and British Columbia, with the launch of two new permanent beers and four seasonal beers. Additionally, Big Rock launched a limited edition 30th anniversary pack to commemorate the original three beers. AGD and certain private-label products continued to see strong growth following comprehensive rebranding.
• In addition to the new products launched in the quarter, Big Rock expects to release six new Calgary-brewed products during the remainder of 2015.
• Big Rock also expects to launch from its new Vancouver brewery several permanent and a variety of seasonal beers brewed specifically for the B.C. market during the remainder of 2015.

Additional information

The financial statements, and management's discussion and analysis, dated Nov. 5, 2015, can be viewed on Big Rock's website and on SEDAR.

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