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

WATERLOO, ON, Dec. 10 /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 third quarter of fiscal 2010.

"The success of Waterloo Dark and Red Baron brands continued into the third quarter inspiring the launch of two new products, Red Baron Lime and Red Baron Light," said George Croft, President & CEO. "Red Baron's clear bottle provides a significant point of difference compared to other brands at a similar price point. Differentiation is crucial in a marketplace that is fundamentally changed from a year ago."

The experience of this past year has made it clear that the increase in the Minimum Retail Price of beer has reduced the price gap between the value segment and mainstream beer prices and put significant downward pressure on the Laker brand. The Laker brand must undergo a transformation to stem the decline and the Company is in the midst of a strategic review of the brand with a focus on all facets of the marketing mix.

"Management is constantly seeking opportunities to reduce costs. During the third quarter, the Company signed a distribution outsourcing agreement with Ryder to reduce shipping costs by approximately $0.5 million annually," said Russell Tabata, Chief Technical Officer. "The Company has also been diligent in reducing costs with respect to packaging materials. The Company has made strides in the year to improve margin per hectoliter through targeted capital spending. We will continue this approach in fiscal 2011 with a capital plan of approximately $2.3 million designed to deliver annual savings of $0.5 million."

    
    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           $          -  $          -  $          -  $          -
    -------------------------------------------------------------------------
    

These statements should be read in conjunction with the audited annual financial statements of the Company.

Additional Information

For further details the Company's management discussion and analysis (MD&A) and financial statements for the quarter ended October 31, 2009 will be available on the investor section of the Brick Brewing website at www.brickbeer.com. Additional information relating to the Company, including its Annual Information Form, is 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 brand 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 December 9, 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 decline, 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 decrease, 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 December 9, 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

SOURCE Brick Brewing Co. Limited

For further information: For further information: George Croft, President & CEO, Tel: (519) 576-9519 x. 247, e-mail: info@brickbeer.com

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Brick Brewing Co. Limited

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