Brick Brewing reports annual results



    WATERLOO, ON, April 30 /CNW/ - Brick Brewing Co. Limited (TSX: BRB),
Ontario's largest Canadian-owned and Canadian-based publicly held brewery,
today released its financial results for the fourth quarter and year ended
January 31, 2009.
    "Financial results for fiscal 2009 ("F2009") were extremely challenging",
said George Croft, President and Chief Executive Officer, "However, the
Company has made significant and sustainable improvement in the cost structure
of the organization and has established a solid foundation for the business to
move forward." The strategic pillars continue to direct the focus and efforts
of the entire Company, including:

    
    -   Building a strong owner brand portfolio in both the value and premium
        beer segments.

    -   Focusing our investments against the biggest opportunities that drive
        revenue growth or deliver sustainable cost reduction.

    -   Growing in the most profitable channels and regional geographic
        markets.

    -   Optimizing Brick's operating assets.

    -   Building a high performance, disciplined, winning organization that
        is fully committed to excellence in execution.
    

    SIGNIFICANT FOURTH QUARTER EVENTS

    During the fourth quarter of fiscal 2009 gross revenues were $13.5
million, as compared to $14.0 million in the same period last year, a decrease
of 3.5%. Gross revenues for the fourth quarter included revenues of $626
thousand from co-pack activities, an increase from $498 thousand in the
previous year. In the quarter, proprietary beer volumes decreased by 10% over
the same period last year. Net revenues for the fourth quarter were $6.6
million compared to $6.3 million in the fourth quarter last year, an increase
of 5%.
    Selling, marketing and administration costs were fairly consistent in the
fourth quarter over the same period last year.
    In the fourth quarter, future income tax expense was $1.4 million, net of
a non-cash valuation allowance of $3.0 million to account for the portion of
the non-capital losses carried forward which may not be realized.
    The net loss in the fourth quarter included a charge to income for the
impairment of the long-term assets at the Formosa facility. Given the shift of
the brewing production to the Waterloo facility and the uncertainty regarding
the future prospects for the Formosa facility, the Company recognized an
impairment charge of approximately $3.3 million. This is the excess of the
carrying value of the assets over their fair value.
    In the fourth quarter of fiscal 2009, the Company reviewed the
amortization period for returnable containers. The Company previously
recognized purchases of bottles over a period ranging from five to ten years.
A review of industry data regarding bottle lifespan, return rates and turnover
period indicated that the estimated useful life was too high and a more
relevant amortization period is four years. An adjustment to cost of goods
sold of approximately $608 thousand has been recognized to reflect the change
in estimate.
    Further, a retirement allowance was paid to Jim Brickman and severance to
other employees in the fourth quarter resulting in an increase in expenses
from the fourth quarter last year of approximately $480 thousand.
    EBITDA(*) was a loss of $1,134 thousand in the fourth quarter of fiscal
2009, compared to a loss of $117 thousand in the fourth quarter of fiscal
2008.

    Annual Financial Highlights

    Net revenues for fiscal 2009 were $29.9 million as compared to $30.3
million for fiscal 2008, a decrease for the year of 1.4%. Gross revenues
decreased 5.1% to $65.1 million for fiscal 2009, compared to $68.6 million for
fiscal 2008.
    The Company's volumes of its mainstream and premium brands decreased 6.7%
and the Company's Laker brand volumes decreased by 9.4% during the year.
    Revenues from co-pack activities were $2.9 million in fiscal 2009
compared to $1.1 million last year. These increased revenues reflect
additional co-pack volumes from existing and new contracts.
    Cost of goods sold for the year increased to $25.2 million from $24.4
million in the prior year. Excluding the non-cash adjustment of $0.6 million
to adjust the amortization period of returnable containers, cost of goods sold
was fairly constant despite a decline in volumes. Reductions in the cost of
packaging materials, labour and warehousing costs were offset by increases in
brewing material costs, utilities, and delivery costs.
    Selling, marketing, and administration expenses for the year totalled
$4.5 million; a decrease of $1.7 million from the previous year's total
expenditures of $6.2 million, with the key driver being the receipt of funding
from the Ontario Craft Brewers Opportunity Fund (the "Fund"). The Company
received $1 million in December 2008. The Fund is a four-year program.
    The EBITDA(*) loss for the year was $740 thousand compared to a $620
thousand EBITDA loss in the prior year.

    
    -   Net loss was $7.5 million compared to $2.6 million. Severance and
        retirement allowance expense totalled $979 thousand for the year.
        Significant non-cash charges include the Formosa impairment of
        $3.3 million, a future tax valuation allowance of $3.0 million and
        the cost of goods sold adjustment of $0.6 million pertaining to a
        review of the amortization period applicable to returnable
        containers.

                          Brick Brewing Co. Limited
     Consolidated Statements of Income, Comprehensive Income and Deficit
                                 (unaudited)
                      (000's), except per share amounts

                                Three Months Ended          Year Ended
    -------------------------------------------------------------------------
                              January 31, January 31, January 31, January 31,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------

    Gross Revenue               $ 13,553    $ 14,047    $ 65,096    $ 68,597
      Less Production taxes
       & distribution fees        (6,971)     (7,776)    (35,210)    (38,288)
    -------------------------------------------------------------------------
    Net revenue                    6,582       6,271      29,886      30,309

    Cost of goods sold             6,000       5,220      25,223      24,450
    -------------------------------------------------------------------------
    Gross profit                     582       1,051       4,663       5,859

    Selling, marketing
     and administration            1,319       1,130       4,509       6,211

    -------------------------------------------------------------------------
    Earnings (loss) before
     the undernoted                 (737)        (79)        154        (352)

    Other income (expenses):
      Severance costs and
       retiring allowance           (482)          -        (979)       (249)
      Impairment of long-term
       assets                     (3,349)          -      (3,349)          -
      Interest on long-term debt     (56)        (66)       (342)       (444)
      Other income (expense)         122        (166)        172        (121)
      Amortization                  (721)       (414)     (1,998)     (1,736)
      Equity (loss) earnings on
       long term investment         (100)         14         (83)         26
    -------------------------------------------------------------------------
                                  (4,586)       (632)     (6,579)     (2,524)

    -------------------------------------------------------------------------
    Net loss before provision
     for income taxes             (5,323)       (711)     (6,425)     (2,876)

    Future income tax expense
     (recovery)                    1,367         407       1,047        (285)
    -------------------------------------------------------------------------
    Net loss and comprehensive
     loss                         (6,690)     (1,118)     (7,472)     (2,591)

    Deficit, beginning of year    (7,634)     (5,734)     (6,852)     (4,158)
    Cumulative effect of
     adopting new accounting
     policies, net of tax                                      -        (103)

    -------------------------------------------------------------------------
    Deficit, end of period      $(14,324)   $ (6,852)   $(14,324)   $ (6,852)
    -------------------------------------------------------------------------

    Net earnings/loss per share:
      Basic                     $  (0.24)   $  (0.05)   $  (0.31)   $  (0.12)
      Diluted                      (0.24)      (0.05)      (0.31)      (0.12)
    -------------------------------------------------------------------------



                          Brick Brewing Co. Limited
                         Consolidated Balance Sheets
                                 (unaudited)
                                   (000's)

    -------------------------------------------------------------------------
                                                            2009        2008
    -------------------------------------------------------------------------
    Assets

    Current assets:
      Cash                                              $    209    $      -
      Accounts receivable                                  2,097       2,571
      Inventories                                          5,309       7,277
      Future income taxes                                    522          55
      Prepaid expenses                                       508         510
    -------------------------------------------------------------------------
                                                           8,645      10,413

    Property, plant and equipment                         13,523      16,989
    Long-term investment                                       -         106
    Trademarks and listings fees                           5,402       5,428
    Deferred costs                                           369         384
    Other asset                                               50         213
    Future income taxes                                      547       2,063
    -------------------------------------------------------------------------
                                                        $ 28,536    $ 35,596
    Liabilities and Shareholders' Equity

    Current liabilities:
      Bank indebtedness                                 $      -    $  2,791
      Trade accounts payable and accrued liabilities       3,846       3,038
      Current portion of long-term debt                      924         907
      Current portion of obligations under capital lease     419         557
      Deferred grants                                        271           -
    -------------------------------------------------------------------------
                                                           5,460       7,293

    Long-term debt                                         2,068       2,992

    Shareholders' equity:
      Share capital                                       34,658      31,539
      Contributed surplus                                    674         624
      Deficit                                            (14,324)     (6,852)
    -------------------------------------------------------------------------
                                                          21,008      25,311

    -------------------------------------------------------------------------
                                                        $ 28,536    $ 35,596
    -------------------------------------------------------------------------



                          Brick Brewing Co. Limited
                    Consolidated Statements of Cash Flows
                                 (unaudited)
                                   (000's)

                                Three Months Ended          Year Ended
    -------------------------------------------------------------------------
                              January 31, January 31, January 31, January 31,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------

    Cash provided by (used in):
    Operations:
      Loss for the period       $ (6,690)   $ (1,118)   $ (7,472)   $ (2,591)
      Items not involving cash:
        Amortization &
         amortization of other
         assets                      729         420       2,013       1,757
        Impairment on long-term
         assets                    3,349           -       3,349           -
        Stock based compensation     126          10         198          80
        Equity (earnings) loss of
         long-term investment        100         (14)         83         (26)
        Future income taxes
         (recovery)                1,367         370       1,048        (285)
      Change in non-cash
       operating working capital   1,880        (459)      2,796         228
    -------------------------------------------------------------------------
                                     861        (791)      2,015        (837)
    Financing:
      Increase (decrease) in
       bank indebtedness            (162)        951      (2,791)      2,791
      Repayment of long-term debt    (54)        (50)       (907)       (890)
      Issue of capital stock, net
       of costs                       20          13       2,612          35
      Stock options exercised          -           -         358           -
      Repayment of obligations
       under capital lease           (32)        (51)       (138)       (204)
    -------------------------------------------------------------------------
                                    (228)        863        (866)      1,732
    Investments:
      Acquisition of property,
       plant and equipment and
       listing fees                 (424)        (72)       (940)       (949)
    -------------------------------------------------------------------------
                                    (424)        (72)       (940)       (949)

    -------------------------------------------------------------------------
    Net increase (decrease) in
      cash                           209           -         209         (54)

    Cash, beginning of period          -           -           -          54

    -------------------------------------------------------------------------
    Cash, end of period         $    209    $      -    $    209    $      -
    -------------------------------------------------------------------------

    These statements should be read in conjunction with the audited annual
financial statements of the Company. Certain prior year amounts have been
reclassified to conform to the current year's presentation format.

    Fiscal 2010 Outlook

    "The Company has previously committed to cost savings of $2 million in
fiscal 2010 ("F2010") and is making very good progress", added Mr. Croft.

    -   The Company's new can line is expected to generate savings of
        approximately $400 thousand in F2010 through a reduction in the cost
        of distribution and foreign exchange.

    -   The Company has delivered improved operating efficiencies at its
        Kitchener packaging facility of 6% in F2009 and is looking for
        continued improvement in F2010. In F2009 we reduced the complexity of
        our business by centralizing our brewing and eliminating the
        J.R. Brickman Series of beers. We will continue this focus in F2010.

    -   The staff restructuring that occurred in F2009 is expected to save
        the Company approximately $500 thousand annually.
    

    "We are also working hard to improve our net revenues", said Mr. Croft.
"The government increase in the minimum retail price of beer will provide a
lift in revenue provided that the Company can maintain and/or grow its beer
volumes. The Company is seeing very positive results on the re-launch of the
Red Baron brand and continued strong performance of the Waterloo Dark and
Wheat brands. Stopping the decline in Laker volumes is a priority in F2010 and
we are optimistic about our Laker marketing initiatives, which include radio,
billboards and co-marketing."

    Additional Information

    For further details the Company's complete MD&A and financial statements
for the year ended January 31, 2009 will be available on the investor section
of the Brick website at www.brickbeer.com. Additional information relating to
the Company, including its Annual Information Form is or will be available
there and on SEDAR at www.sedar.com.

    About Brick Brewing

    Brick Brewing Co. Limited is Ontario's largest Canadian-owned and
Canadian-based publicly held brewery. The Company is a regional brewer of
award winning premium quality and value beers. The Company, founded in 1984,
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 family of premium craft beers with other popular
brands such as Laker, Red Baron, Red Cap and Formosa Springs Draft. Brick
trades on the TSX under the symbol BRB. Visit us at www.brickbeer.com

    Forward-Looking Statements

    Except for the historical information contained herein, the discussion in
this press release contains certain forward-looking statements that involve
risks and uncertainties, such as statements of the Company's plans,
objectives, strategies, expectations and intentions and include, for example,
the statements concerning expected volumes, operating efficiencies and costs.
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 Company
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. These forward-looking statements are not
guarantees and reflect the Company's views as of April 30, 2009 with respect
to future events. Future events 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, including the statements regarding expected volumes, operating
efficiencies and costs are based on, among other things, the following
material factors and assumptions: volumes in the fiscal year ending January
31, 2010 ("fiscal 2010") will increase, no material changes in consumer
preferences, brewing and packaging efficiencies will improve, input costs for
brewing materials will decrease, the cost of packaging materials will
increase, competitive activity from other brewers will continue, no material
change to the regulatory environment in which the Company operates and no
material supply, cost or quality control issues with vendors. Readers are
urged to consider the foregoing factors and assumptions when reading the
forward-looking statements and, for more information regarding the risks,
uncertainties and assumptions that could cause the Company's actual financial
results to differ from the forward-looking statements, to also refer to the
Company's MD&A, the Company's annual information form and various other public
filings. The forward-looking statements included in this press release are
made only as of April 30, 2009 and, except as required by applicable
securities laws, the Company does not undertake to publicly update such
forward-looking statements to reflect new information, future events or
otherwise.

    
    (*) 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.
    

    %SEDAR: 00003334E




For further information:

For further information: George H. Croft, President and CEO, Tel: (519)
576-9519 Ext. 247, E-mail: info@brickbeer.com

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Brick Brewing Co. Limited

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