Big Rock Brewery Inc. Announces Third Quarter Financial Results

CALGARY, Nov. 3, 2016 /CNW/ - Big Rock Brewery Inc. (TSX: BR) ("Big Rock" or the "Corporation") announced its financial results today for the three and nine months ended September 30, 2016.

The Corporation reported net revenue of $11.9 million on sales volumes of 54,837 hectoliters ("hl")  for the third quarter of 2016 compared to net revenue of $11.9 million on 55,132 hl for the same period in 2015. Net revenues and volumes remained relatively consistent during the third quarter, compared to the prior year, as volume growth in Alberta was offset by lower sales volumes in other provinces. Net operating profit was $416 thousand for the three months ended September 30, 2016, compared to an operating loss of $46 thousand for the same period in 2015, while net income was $234 thousand for the third quarter of 2016 as compared to a net loss of $166 thousand for the third quarter of 2015.

Big Rock grew volumes and gross profit in Alberta, the Company's largest market and the province with the greatest competition in Canada, while at the same time keeping selling expenses below the same periods in 2015. Continued competitive pressure reduced volumes on legacy brands, which were partially offset by growth in new products such as Citradelic Single Hop IPA and new Rock Creek cider products. National launches in the quarter included a 6-pack format of Hollow Tree Red Ale, a product from our Vancouver brewery which was the recipient of the Silver Award for North American Style Amber/Red Ale at the Canadian Brewing Awards and first place for Amber/Brown Ale at the 2015 BC Beer Awards. As well, Big Rock launched the latest version of Barn Burner, a variety pack that introduces Golden Ale, and re-introduces past favourites Porter and Magpie. Winter Spice, a seasonal favourite, has returned as well. New and rebranded private label beers, launched late last year, and AGD, Big Rock's most approachable lager, continued to see strong consumer demand. The current economic conditions in Alberta combined with the rebranding and relaunching of these lower-priced products have resulted in enthusiastic response from consumers and continued compression of average margins.

Late in the third quarter, the Ontario brewery commenced production at the Etobicoke site and the official opening of the by-the-glass tasting and retail area was held on September 17, 2016. Construction at the Liberty Village brewpub progressed on schedule and is expected to begin a phased opening later in the fourth quarter of 2016.  Cashmere Crooner Single Hop Lager, the first new beer created by our Etobicoke brewmaster, was introduced to the Ontario market as a seasonal offering.

Robert Sartor, Big Rock's C.E.O. remarked that, "With the opening of our new Etobicoke brewery and the imminent opening of our Liberty Village taproom in the fourth quarter, the build-out of our distributed brewing facilities, which has been three years in the making, is behind us.  Our focus for 2017 will be the continued growth of our B.C. brewery and to sustain the momentum of our recently opened Ontario brewery which has attracted new listings at the LCBO and in the grocery channel."

Summary of Results


Three months ended

September 30

Nine months ended

September 30

$ thousands (except per HL amounts)

2016

2015

2016

2015

Sales volumes (hl)

54,837

55,132

154,065

139,164

Net revenue

11,856

11,905

33,191

30,147

Operating profit (loss)

416

133

(46)

(1,002)

Net income (loss)

234

76

(166)

(1,021)

Per hl wholesale net revenue

207.83

206.56

205.70

208.27

Per hl wholesale cost of sales

105.49

114.43

110.48

112.86

 

Financial and Operating Highlights

  • Volume, revenue, and gross profit growth occurred in Big Rock's largest market, Alberta, primarily in AGD and private label branded products and
  • Big Rock expects to release limited-edition products from Calgary, Vancouver and Etobicoke, during the remainder of 2016.

Additional Information

The Financial Statements and Management's Discussion and Analysis dated November 3, 2016 can be viewed on Big Rock's website at www.bigrockbeer.com/connect/investors and on SEDAR at sedar.com under Big Rock Brewery Inc.

Forward-Looking Information

Certain statements contained in this News Release constitute forward-looking statements. These statements relate to future events or Big Rock's future performance. All statements, other than statements of historical fact, may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "plans", "expects", "intends" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Big Rock believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this News Release not be unduly relied upon by investors as actual results may vary materially from such forward-looking statements. These statements speak only as of the date of this News Release and are expressly qualified, in their entirety, by this cautionary statement.

In particular, this News Release contains forward-looking statements pertaining to the following:

  • the expected phased opening of the Liberty Village brewpub in the fourth quarter of 2016;
  • the Corporation's focus on continues growth of the BC brewery in 2017;
  • the number of additional limited edition products to be released;
  • the success of new products and initiatives in the future; and
  • the timing of new products and initiatives and the extent to which they will provide incremental sales volumes and improve profitability.

With respect to the forward-looking statements listed above and contained in this News Release, management has made assumptions regarding, among other things:

  • new products and services introduced will result in incremental sales volumes; and
  • permitting and other construction activities will be able to be secured and/or completed within expected timeframes.

Some of the risks which could affect future results and could cause results to differ materially from those expressed in the forward-looking information and statements contained herein include, but are not limited to:

  • the inability to secure the requisite regulatory approvals to market the full production of the new facilities in Toronto within the timeframe indicated; and
  • the inability to secure and complete construction services for the new facility within the timeframe indicated; and
  • unexpected changes in demand or production which impact anticipated product releases.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking information and statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking information and statements included in this News Release are made as of the date hereof and Big Rock does not undertake any obligation to publicly update such forward-looking information and statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

About Big Rock Brewery Inc.

Big Rock Brewery Inc. produces premium, all-natural craft beers. Big Rock has a broad family of permanent ales and lagers, the Rock Creek Cider® series of craft ciders and an ongoing selection of seasonal and cutting-edge, small-batch brews. Big Rock brews in Calgary, Alberta, Vancouver, British Columbia, and Toronto Ontario.

For more information on Big Rock Brewery visit bigrockbeer.com

SOURCE Big Rock Brewery Inc.

Image with caption: "Big Rock Brewery Inc. (CNW Group/Big Rock Brewery Inc.)". Image available at: http://photos.newswire.ca/images/download/20161103_C3539_PHOTO_EN_811755.jpg

For further information: please contact: Robert Sartor, President and Chief Executive Officer, or Barbara Feit, Chief Financial Officer: Phone: (403) 720 3239, Fax: (403) 720 3641, Email: investors@bigrockbeer.com

RELATED LINKS
www.bigrockbeer.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890