KITCHENER, ON
-- (Marketwired)
-- 12/09/16
Third Quarter Highlights:
- Net Revenue for the third quarter increased to $11.1 million compared to $9.8 million in the third quarter of fiscal 2016.
- Gross profit margin for the quarter was 34.3%, an increase from 25.7% in prior year.
- Selling, Marketing and Administration ("SM&A") of $2.3 million, compared to prior year at $1.8 million.
- EBITDA* for the quarter increased to $2.0 million compared to EBITDA* in the third quarter of fiscal 2016 of $1.5 million.
- The Board of Directors approved an increase to the quarterly dividend, to $0.016/share, payable January 24, 2017 to shareholders of record as of January 10, 2017. The dividend is classified as an eligible dividend
Year to Date Highlights:
- Net revenue increased to $34.6 million, from $28.6 million in the prior year.
- Gross margin improved to 35.6% from 27.0% prior year.
- Selling, Marketing and Administration ("SM&A") expenses increased to $6.9 million from $5.6 million.
- EBITDA* improved to $7.1 million year to date, up from $4.0 million in the prior year.
Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), Ontario's largest Canadian-owned brewery, today released results for the third quarter ended October 30, 2016.
Net Revenues for the third quarter of fiscal 2017 grew to $11.1 million, up from $9.8 million in the third quarter of fiscal 2016. Gross margins for the quarter increased to 34.3% versus 25.7% in Q3 of the prior year. Margin expansion was supported by volume growth, improved product mix, strong pricing, as well as overall cost reductions in operations. EBITDA for the third quarter of fiscal 2017 improved to $2.0 million, reflecting a continuation of the strong results reported in the first half of the year.
"This was, by any measure, another tremendous quarter for Brick Brewing," noted George Croft, President and CEO. "We're reporting double digit growth in branded volume, co-pack revenue and net sales. We've been able to expand margins, increase the investment in our brands, and still deliver over 30% growth in EBITDA. Our Laker brand posted 13% volume growth while LandShark continued to resonate with consumers. Our Waterloo brand declined modestly in the quarter, due to channel inventory reductions . Counter sales for Waterloo remained strong, and are consistent with our year to date growth, up 14% vs prior year. We have been successful in growing market share, and the strong response we've enjoyed from our consumers has allowed us to outperform the category."
As a result of the strength in operating and financial performance, Brick is also announcing today an increase in the quarterly dividend, to $0.016/share, up from $0.012/share. The dividend is payable January 24 to shareholders of record as of January 10, 2017. The dividend is an eligible dividend. Chief Financial Officer Sean Byrne commented, "The increase in the dividend is simply a continuation of our commitment to deliver value to shareholders. We believe it also speaks volumes about our ability to both invest in growing our business while at the same time increasing returns to shareholders."
Croft added, "Although we are enormously pleased with our results to date, we are taking nothing for granted. We will continue to focus on executional excellence, and will be working hard to ensure a strong finish for the year."
The following financial information should be read in conjunction with the audited annual financial statements of the Company prepared under IFRS for the year ended January 31, 2016.
Reconciliation of Net Earnings to Earnings Before Interest Taxes
Depreciation and Amortization, and Share Based Payments (EBITDA)*
Fiscal year-to-date
Quarter ended ended
------------------------------------------------
October 30, October 25, October 30, October 25,
(in thousands of dollars) 2016 2015 2016 2015
---------------------------------------------------------------------------
Net income $ 854 $ 492 $ 3,277 $ 1,102
Add (deduct):
Income tax expense 291 141 1,067 377
Depreciation and
amortization 753 881 2,240 2,263
Gain on disposal of
property, plant and
equipment - (197) - (197)
Share-based payments 44 31 105 94
Finance costs 103 122 386 357
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Subtotal 1,191 978 3,798 2,894
EBITDA* 2,045 1,470 7,075 3,996
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STATEMENTS OF COMPREHENSIVE INCOME
For the quarters ended October 30, 2016 and October 25, 2015
(Not audited or reviewed by the Company's external auditor)
Quarter ended Fiscal year-to-date ended
------------------------- -------------------------
October 30, October 25, October 30, October 25,
2016 2015 2016 2015
------------------------------------------------ -------------------------
Revenue $ 11,106,289 $ 9,829,613 $ 34,636,967 $ 28,573,912
Cost of sales 7,302,657 7,302,829 22,317,110 20,850,298
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Gross profit 3,803,632 2,526,784 12,319,857 7,723,614
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Selling, marketing and
administration
expenses 2,349,468 1,828,723 6,938,887 5,649,363
Other expenses 205,192 140,642 650,592 435,259
Finance costs 103,043 121,779 385,595 357,011
Gain on disposal of
property,plant and
equipment - (196,912) (196,912)
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Income before tax 1,145,929 632,552 4,344,783 1,478,893
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Income tax expense 291,495 141,082 1,067,360 376,839
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Net income and
comprehensive income $ 854,434 $ 491,470 $ 3,277,423 $ 1,102,054
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Basic earnings per
share 0.02 $ 0.01 0.09 $ 0.03
Diluted earnings per
share 0.02 $ 0.01 0.09 $ 0.03
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STATEMENTS OF FINANCIAL POSITION
As at October 30, 2016 and January 31, 2016
(Not audited or reviewed by the Company's
external auditor)
October 30, January 31,
2016 2016
----------------------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and equipment $ 21,442,784 $ 21,986,070
Intangible assets 15,446,064 15,375,392
Equipment Deposits 940,000 -
Deferred income tax assets 195,409 1,262,769
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38,024,257 38,624,231
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Current assets
Cash 1,058,357 393,645
Accounts receivable 8,064,326 6,176,421
Inventories 4,923,030 3,291,529
Prepaid expenses 700,243 354,650
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14,745,956 10,216,245
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TOTAL ASSETS 52,770,213 48,840,476
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LIABILITIES AND EQUITY
Equity
Share capital 39,784,425 39,526,573
Share-based payments reserves 910,387 932,200
Deficit (2,916,793) (4,933,195)
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TOTAL EQUITY 37,778,019 35,525,579
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Non-current liabilities
Provisions 405,836 388,548
Obligation under finance lease 3,969,824 4,523,152
Long-term debt 2,690,640 1,548,584
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7,066,300 6,460,284
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Current liabilities
Accounts payable and accrued liabilities 6,454,797 4,908,722
Current portion of obligation under
finance lease 734,299 713,699
Current portion of long-term debt 736,798 1,232,192
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7,925,894 6,854,613
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TOTAL LIABILITIES 14,992,194 13,314,897
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COMMITMENTS
TOTAL LIABILITIES AND EQUITY $ 52,770,213 $ 48,840,476
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STATEMENTS OF CASH FLOW
For the quarters ended October 30, 2016 and October 25, 2015
(Not audited or reviewed by the Company's external auditor)
Fiscal year-to-date
Quarter ended ended
---------------------------------------------------
October 30, October 25, October 30, October 25,
2016 2015 2016 2015
----------------------------------------------------------------------------
Operating activities
Net income $ 854,434 $ 491,470 $ 3,277,423 $ 1,102,054
Adjustments for:
Income tax expense 291,495 141,082 1,067,360 376,839
Finance costs 103,043 121,779 385,595 357,011
Depreciation and
amortization of
property, plant and
equipment and
intangibles 753,154 881,271 2,240,006 2,263,243
Gain on disposal of
property, plant and
equipment - (196,912) - (196,912)
Share-based payments 44,157 30,527 105,100 94,448
Change in non-cash
working capital
related to
operations 56,623 1,681,820 (2,320,224) 591,094
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Less:
Interest paid (103,603) (214,730) (308,583) (325,861)
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Cash provided by
operating activities 1,999,303 2,936,307 4,446,677 4,261,916
Investing activities
Purchase of property,
plant and equipment (579,491) (831,658) (1,681,420) (2,151,101)
Equipment deposit paid (940,000) (111,293) (940,000) (936,595)
Proceeds from sale of
property, plant and
equipment, net - 322,490 - 322,490
Purchase of intangible
assets (18,339) (15,692) (85,972) (277,784)
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Cash used in investing
activities (1,537,831) (636,153) (2,707,392) (3,042,990)
Financing activities
Increase in bank
indebtedness - (1,351,117) - -
Issuance of long-term
debt - - 2,000,000 -
Repayment of long-term
debt (180,321) (355,042) (1,411,762) (1,122,835)
Repayment of
obligation under
finance lease (179,263) (132,741) (532,728) (132,741)
Dividends paid (421,320) - (1,261,021) -
Issuance of shares,
net of fees 2,490 4,750 10,458 9,975
Shares repurchased and
cancelled, including
fees (3,883) (76,353) (54,197) (178,651)
Proceeds from stock
option exercise 138,850 904 174,677 904
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Cash used in financing
activities (643,447) (1,909,599) (1,074,573) (1,423,348)
Net increase/(decrease)
in cash (181,975) 390,554 664,712 (204,422)
Cash, beginning of the
period 1,240,332 - 393,645 594,976
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Cash, end of the period $ 1,058,357 $ 390,554 $ 1,058,357 $ 390,554
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Non-cash investing and
financing activities:
Acquisition of assets
under finance lease $ - $ 805,878 $ - $ 4,208,021
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1. The purchase of property, plant and equipment excludes assets held under finance lease
About Brick Brewing
Brick is Ontario's largest Canadian-owned brewery. The Company is a regional brewer of award-winning premium quality and value beers and is officially certified under the Global Food Safety Standard, one of the highest and most internationally recognized standards for safe food production. Founded in 1984, Brick Brewing Co. was the first craft brewery to start up in Ontario, and is credited with pioneering the present day craft brewing renaissance in Canada. Brick has complemented its Waterloo premium craft beers with the popular Laker brand. In 2011, Brick purchased the Canadian rights to Seagram Coolers and in 2015, secured the exclusive Canadian rights to both LandShark and Margaritaville. In addition, Brick utilizes its leading edge brewing, blending and packaging capabilities to provide an extensive array of contract manufacturing services in beer, coolers and ciders. Brick trades on the TSX under the symbol BRB. Visit us at www.brickbeer.com.
Forward-Looking Statements
All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements as of the date of this press release. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "seek", "plan", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, undue reliance should not be placed on these forward-looking statements, which are not guarantees and are subject to certain risks, uncertainties and assumptions, which may cause actual performance and financial results to differ materially from such forward-looking statements. The forward-looking statements included in this press release are made only at the date of this press release and, except as required by applicable securities laws, the Corporation does not undertake to publicly update such forward-looking statements to reflect new information, future events or otherwise.
* EBITDA is a non-IFRS earnings measure, therefore it does not have any standardized meaning prescribed by International Financial Reporting Standards and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, depreciation and amortization, gain on disposal of property, plant, and equipment, and share based payments. Management uses this measurement to evaluate the operating results of the Company. This measure is also important to management since it is used by the Company's lenders to evaluate the ongoing cash generating capability of the Company and therefore the amounts those lenders are willing to lend to the Company. Investors find EBITDA to be useful information because it provides a measure of the Company's operating performance.
For further information:
Sean Byrne
Chief Financial Officer
(519) 742-2732 Ext.132
E-mail: info@brickbeer.com
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