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Brick Brewing reports financial results for the third quarter, with EBITDA improvement of $1.2 million

^{Published on 2009-12-10 14:27:02 - Market Wire}
 

 Financial highlights for the quarter include: - Net revenue has remained flat compared to the third quarter of fiscal 2009 and grew 4.0% on a year-to-date basis - Gross profit percentage has increased to 26.1% for the first nine months of fiscal 2010 versus 17.7% in the comparable period - EBITDA for the third quarter of fiscal 2010 and nine months ending October 31, 2009 of $0.7 million and $3.2 million respectively, representing an increase of $1.2 million (258%), and $2.7 million (588%) from the same periods last year - Net income of $0.2 million in the third quarter, compared to a loss of $0.6 million last year - Net income of $1.1 million for the first nine months of fiscal 2010 compared to a loss of $0.7 million last year "I am very proud of Brick's progress in fiscal 2010 and look forward to conveying results for the balance of fiscal 2010 and onward," said George Croft. Brick Brewing Co. Limited Consolidated Balance Sheet (unaudited) ------------------------------------------------------------------------- October 31, January 31, 2009 2009 ------------------------------------------------------------------------- (Restated - note 1) Assets Current assets: Cash $ - $ 209,291 Accounts receivable 2,432,405 2,096,781 Inventories 5,903,751 5,309,474 Prepaid expenses 396,752 507,518 Future income taxes 522,338 522,338 ------------------------------------------------------------------------- 9,255,246 8,645,402 Property, plant and equipment 13,995,855 13,522,720 Trademarks and listing fees 5,870,279 5,401,314 Deferred costs 77,424 108,067 Other assets 27,500 50,000 Future income taxes 72,640 626,103 ------------------------------------------------------------------------- $ 29,298,944 $ 28,353,606 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities: Bank indebtedness $ 1,291,915 $ - Accounts payable and accrued liabilities 3,511,484 3,846,187 Current portion of long-term debt 874,450 924,000 Current portion of obligations under capital lease 134,758 419,282 Deferred grants - 270,758 ------------------------------------------------------------------------- 5,812,607 5,460,227 Long-term debt 1,251,800 2,067,900 Obligations under capital lease 184,511 - Shareholders' equity: Share capital 34,655,890 34,657,984 Contributed surplus 766,544 673,593 Deficit (13,372,408) (14,506,098) ------------------------------------------------------------------------- 22,050,026 20,825,479 Contingencies ------------------------------------------------------------------------- $ 29,298,944 $ 28,353,606 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) As a result of adopting CICA Handbook Section 3064, the Company has adjusted the opening retained earnings in the comparative consolidated balance sheet by $182,080 (net of tax) to write off pre-production costs that are no longer permitted to be deferred. Deferred costs and future income taxes, as at January 31, 2009, were reduced by $261,153 and $79,073 respectively. The amounts presented in the consolidated statement of income (loss) and deficit for the third quarter of fiscal 2009 and the nine months ended October 31, 2008 were adjusted as follows: amortization expense has been reduced by $29 thousand and $87 thousand, and the opening deficit has been adjusted by $203,555 and $261,589 respectively. Brick Brewing Co. Limited Consolidated Statement of Income (Loss) and Deficit (unaudited) Three Months Ended Nine Months Ended ------------------------------------------------------------------------- October 31, October 31, October 31, October 31, 2009 2008 2009 2008 ------------------------------------------------------------------------- (Restated - (Restated - note 1) note 1) Gross revenue $ 15,717,895 $ 16,501,409 $ 51,141,174 $ 51,543,872 Less production taxes and distribution fees (8,437,835) (9,206,408) (26,903,965) (28,238,614) ------------------------------------------------------------------------- Net revenue 7,280,060 7,295,001 24,237,209 23,305,258 Cost of sales 5,491,103 6,519,480 17,914,082 19,174,897 ------------------------------------------------------------------------- Gross profit 1,788,957 775,521 6,323,127 4,130,361 Selling, marketing and administration 1,067,183 887,783 3,122,059 3,187,421 ------------------------------------------------------------------------- Earnings before the undernoted 721,774 (112,262) 3,201,068 942,940 Other income (expense): Depreciation and amortization (328,187) (397,839) (1,382,990) (1,190,308) Interest on long-term debt (34,610) (92,226) (111,511) (285,854) Other income (expense) 85 829 1,206 (713) Severance costs (4,856) (296,475) (20,620) (497,278) Equity earnings on long-term investment - (46,875) - 17,339 ------------------------------------------------------------------------- (367,568) (832,586) (1,513,915) (1,956,814) ------------------------------------------------------------------------- Income (loss) before income taxes 354,206 (944,848) 1,687,153 (1,013,874) Future income tax provision (recovery) 112,690 (297,679) 553,463 (318,614) ------------------------------------------------------------------------- Net income and comprehensive income 241,516 (647,169) 1,133,690 (695,260) Deficit, beginning of period (13,613,924) (6,958,365) (14,506,098) (6,852,240) Cumulative effect of adopting new accounting policies, net of tax - (203,555) - (261,589) ------------------------------------------------------------------------- Deficit, beginning of period restated (13,613,924) (7,161,920) (14,506,098) (7,113,829) ------------------------------------------------------------------------- Deficit, end of period $(13,372,408) $ (7,809,089) $(13,372,408) $ (7,809,089) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net earnings per share: Basic $ 0.01 $ (0.03) $ 0.04 $ (0.04) Diluted $ 0.01 $ (0.03) $ 0.04 $ (0.04) ------------------------------------------------------------------------- Brick Brewing Co. Limited Consolidated Statement of Cash Flows (unaudited) Three Months Ended Nine Months Ended ------------------------------------------------------------------------- October 31, October 31, October 31, October 31, 2009 2008 2009 2008 ------------------------------------------------------------------------- (Restated - (Restated - note 1) note 1) Cash provided by (used in): Operations: Income (loss) for the period $ 241,516 $ (647,169) $ 1,133,690 $ (695,260) Items not involving cash: Amortization of property, plant and equipment, deferred costs and other assets 335,688 403,290 1,405,491 1,196,985 Stock based compensation 38,721 28,794 87,657 72,323 Equity earnings on long-term investment - 46,875 - (17,339) Future income tax provision (recovery) 112,690 (297,679) 553,463 (318,614) Change in non-cash operating working capital (35,951) 1,003,560 (1,424,599) 915,616 ------------------------------------------------------------------------- 692,664 537,671 1,755,702 1,153,711 Financing: Increase (decrease) in bank indebtedness 211,668 (2,516,144) 1,291,915 (2,628,879) Repayment of long-term debt (408,150) (403,650) (865,650) (852,750) Repayment of obligation under capital lease (34,032) (31,321) (100,013) (105,875) Issue of capital stock (net of fees) - 2,582,346 3,200 2,643,176 Stock options exercised - 54,750 - 306,750 ------------------------------------------------------------------------- (230,514) (314,019) 329,452 (637,578) Investing: Purchase of property, plant and equipment, listing fees and deferred assets (462,150) (223,652) (2,294,445) (516,133) ------------------------------------------------------------------------- (462,150) (223,652) (2,294,445) (516,133) ------------------------------------------------------------------------- Net decrease in cash - - (209,291) - Cash, beginning of period - - 209,291 - ------------------------------------------------------------------------- Cash, end of period $ - $ - $ - $ - ------------------------------------------------------------------------- 

 * EBITDA is a non-GAAP earnings measure, therefore it does not have any standardized meaning prescribed by Canadian generally accepted accounting principles and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, depreciation and amortization. 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.