Mr. David Kinder reports

BIG ROCK BREWERY INC. ANNOUNCES CONTINUED IMPROVEMENT IN FINANCIAL RESULTS: FISCAL 2023

Big Rock Brewery Inc. has released its financial results for the three months and year ended Dec. 30, 2023.

Financial summary

For the three months ended Dec. 30, 2023, compared with the three months ended Dec. 30, 2022, the corporation reported:

• Wholesale sales volumes (beer, ready-to-drink beverages and cider) down 1 per cent to 35,314 hectolitres (hl), compared with 35,654 hl;
• Net revenue decreased by 15 per cent to $9.0-million, from $10.5-million;
• Operating loss decreased by 60 per cent to $1.5-million, compared with $3.8-million;
• Net loss decreased by $2.1-million from $4.2-million;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased by $2.8-million to negative $700,000. Adjusted EBITDA is a non-GAAP (generally accepted accounting principles) financial measure.

For the year ended Dec. 30, 2023, compared with the year ended Dec. 30, 2022, the corporation reported:

• Wholesale sales volumes (beer, ready-to-drink beverages and cider) down 1 per cent to 157,203 hl, from 158,496 hl;
• Net revenue down 7 per cent to $43.7-million, from $47.1-million;
• Operating loss decreased to $1.6-million, from $6.9-million;
• Net loss decreased to $2.9-million, from $7.1-million;
• Adjusted EBITDA increased by $5.6-million to $2.2-million, from negative $3.4-million;
• $700,000 of term debt was repaid and $3.4-million was drawn in the year on the operating facility for total debt of $16.6-million, representing an increase of $2.8-million from the $13.8-million outstanding as at Dec. 30, 2022.

In December of 2023, the corporation announced that it had concluded its search for a permanent chief executive officer and on Jan. 8, 2024, David Kinder, a veteran of the beverage industry, was appointed president and chief executive officer of the corporation, replacing Stephen Giblin, who had taken on the role on an interim basis.

In January of 2024, the corporation announced the addition of a $4.2-million tranche to its existing $4.3-million second-lien financing with VN Capital, a principal shareholder of Big Rock. This financing was introduced to provide liquidity, access to funds for capital expenditures and to satisfy the $600,000 shortfall incurred during Q4 versus the adjusted EBITDA target provided by the corporation's primary lender, ATB Financial. Under the terms of the credit agreement in place with ATB, this injection of funds satisfied the corporation's obligations with respect to this deficiency. In January of 2024, the corporation also announced it had concluded its strategic review process.

"Resulting from considerable effort and commitment from our team at Big Rock, we are proud to announce significant improvements to Big Rock's performance during the fourth quarter of 2023 versus last year," noted Mr. Kinder. "The $2.8-million improvement in adjusted EBITDA on a year-over-year basis was supplemented by investments in our innovation, sales and marketing programs. These improved financial results were generated despite reduced co-packing volumes during the quarter. During a year when domestic beer sales in Canada were reported to have declined by more than 2 per cent (1), our efforts at Big Rock allowed us to show a modest increase in beer sales year over year. We are extremely proud of our sales, production and packaging teams for this achievement. We believe this momentum, combined with continued attention to streamlining production and maximizing our return on sales and marketing initiatives for our branded, white-label and co-packing businesses, will help us continue to improve our financial results and strengthen our balance sheet."

(1) Source: Beer Canada's monthly domestic beer sales statistics accumulated from provincial liquor boards, distributors and brewers.

Additional information

The audited consolidated financial statements and management's discussion and analysis for the year ended Dec. 30, 2023, dated March 28, 2024, can be viewed on Big Rock's website and on SEDAR+ under Big Rock.

Big Rock is also pleased to announce that the annual meeting of Big Rock shareholders is expected to be held on May 28, 2024, at 2 p.m. Mountain Standard Time. Further details of the annual meeting will follow in due course.

Non-GAAP measures

The corporation uses certain financial measures referred to in this news release to quantify its results that are not prescribed by generally accepted accounting principles. Such financial measures do not have a standardized meaning under GAAP and therefore may not be comparable with similar measures presented by other issuers.

This news release contains the term adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure that the corporation uses to measure operating performance and borrowing capacity. The calculation of adjusted EBITDA is a non-GAAP financial measure, the nearest GAAP measure of which is net income, or net loss, as applicable.

About Big Rock Brewery Inc.

In 1985, Ed McNally founded Big Rock to contest the beer trends of the time. Three bold, European-inspired offerings -- bitter, porter and traditional ale -- forged an industry at a time heavy on easy-drinking lagers and light on flavour. Today, the company's extensive portfolio of signature beers, continuing seasonal offerings, six ciders (Rock Creek Cider series), custom-crafted private-label products and other notable, licensed alcoholic beverages keeps Big Rock at the forefront of the craft beer revolution and still proudly contesting the beer and alcoholic beverage trends of today. Big Rock has brewing operations in Calgary, Alta., Vancouver, B.C., and Toronto, Ont. Big Rock trades on the Toronto Stock Exchange under the symbol BR.

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