Brick Brewing Reports Record EBITDA of $5.4M for Fiscal 2015

Fourth Quarter F2015 Highlights:

  • Net revenue increased to $9.1 million, from $8.0 million in the prior year, with gross margin improving to 31.0% from 25.5%
  • Selling, Marketing and Administration ("SM&A") expenses increased to $1.7 million from
    $1.3 million.
  • EBITDA improved to $1.8 million in the quarter, vs. $1.3 million.

Full Year F2015 Highlights:  

  • Net Revenues for the full year were $36.3 million, compared to $37.7 million for fiscal 2014.
  • Full year gross margin improved to 28.1%, from 26.1% in fiscal 2014.
  • SM&A expenses decreased to $7.6 million, down from $7.8 million the prior year.
  • Fiscal 2015 EBITDA* increased 17% to $5.4 million compared to EBITDA* reported for fiscal 2014 of $4.6 million.

KITCHENER, ON, April 13, 2015 /CNW/ - Brick Brewing Co. Limited ("Brick" or the "Company") (TSX: BRB), the largest Canadian-owned and Canadian-based publicly held brewery in Ontario, today released financial results for the fourth quarter and year ended January 31, 2015. Brick posted record annual EBITDA of $5.4 million on net revenue of $36.3 million. In the fourth quarter, Brick achieved EBITDA of $1.8 million, compared to EBITDA of $1.3 million in the fourth quarter of the prior year.

Brick's president and chief executive officer George Croft said, "Overall, F2015 was a good year for Brick.  We grew EBITDA, continued to expand our gross margins, made good progress in building a stronger brand portfolio and increasing our share in craft premium.  We also continued to improve our sales execution, revenue management capabilities and increased the efficiency of our operation.  As a result, we delivered record EBITDA of $5.4 million."

Brick's premium craft beer brand, Waterloo, posted full year volume growth of 21%.  In addition to the successful launch of Waterloo Grapefruit Radler, the Company also achieved strong growth in the Waterloo core offerings – Dark, Pilsner, IPA and Amber.  Mr. Croft continued, "Waterloo performance in fiscal 2015 was exceptional, outperforming the craft category by a significant margin."  In the Seagram's brand, volume was down 13% for the year, largely due to loss of select LCBO listings.  The LCBO listing losses were mitigated by Seagram's apple cider, which grew over 25% in the year, and by Seagram's malt, sold through The Beer Store, which grew over 80%. "The category extensions we've introduced under the Seagram brand are paying dividends.  Malt-based beverages and cider are fast growing categories, and our entries there have begun to resonate with consumers.  We believe we're in the early stages of growth for cider and malt beverages, so we're looking for this strong performance to continue," said Croft.

Brick previously announced a project to expand its Kitchener facility.  The project, targeted for completion by the end of October 2015, is expected to deliver a minimum of $1 million in recurring savings.  Russell Tabata, Chief Operating Officer at Brick, noted, "This is the largest capital project in our Company's history, and it's getting our full attention.  Several months into the project, we're right on track in terms of progress and spending.  On completion, the investment will leave us with a leading edge, fully integrated facility that will allow us to significantly improve our competitive position with the large international brewers."

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, 2015.

Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization, and Share Based Payments (EBITDA)*




Fiscal year ended

(in thousands of dollars)


January 31, 2015


January 31, 2014






Net income

$

1,395

$

525






Add (deduct):






Income tax expense


628


201


Depreciation and amortization


3,147


2,995


Loss (gain) on disposal of property, plant and equipment


(436)


(29)


Share-based payments


122


195


Finance costs


535


692

Subtotal


3,996


4,054






EBITDA*


5,391


4,579

STATEMENTS OF COMPREHENSIVE INCOME
Years ended January 31, 2015 and 2014



January 31, 2015 

January 31, 2014 







Revenue


$

36,332,507

$

37,673,606

Cost of sales



26,135,860


27,857,161

Gross profit



10,196,647


9,816,445







Selling, marketing and administration expenses



7,563,543


7,770,727

Other expenses



511,719


626,887

Finance costs



535,110


692,156

Gain on disposal of property, plant and equipment



(436,365)


-

Income before tax



2,022,640


726,675







Income tax expense



627,571


201,476

Net income and comprehensive
income for the year


$

1,395,069

$

525,199













Basic earnings per share


$

0.04

$

0.02

Diluted earnings per share


$

0.04

$

0.02

STATEMENTS OF FINANCIAL POSITION
As at January 31, 2015 and 2014





January 31, 2015 


January 31, 2014 








ASSETS






Non-current assets







Property, plant and equipment

$

15,582,051

$

15,449,248



Intangible assets


15,114,247


14,752,855



Deferred income tax assets


1,921,161


2,548,732



Construction deposit


1,478,220


-




34,095,679


32,750,835








Current assets







Cash


594,976


-



Accounts receivable


6,492,461


5,865,024



Inventories


3,400,821


3,951,436



Assets held for sale


-


3,406,400



Prepaid expenses


350,154


395,559




10,838,412


13,618,419








TOTAL ASSETS


44,934,091


46,369,254








LIABILITIES AND EQUITY






Equity







Share capital


39,413,636


38,955,236



Share-based payments reserves


1,075,554


1,060,533



Deficit


(6,107,475)


(7,502,544)


TOTAL EQUITY


34,381,715


32,513,225








Non-current liabilities







Provisions


307,235


289,083



Obligation under finance lease


1,266,996


-



Long-term debt and promissory note


2,642,676


4,265,018




4,216,907


4,554,101








Current liabilities







Bank indebtedness


-


1,694,178



Accounts payable and accrued liabilities


4,665,784


6,050,679



Current portion of obligation under finance lease


46,925


-



Current portion of long-term debt and promissory note


1,622,760


1,557,071




6,335,469


9,301,928








TOTAL LIABILITIES


10,552,376


13,856,029








COMMITMENTS












TOTAL LIABILITIES AND EQUITY

$

44,934,091

$

46,369,254

STATEMENTS OF CASH FLOWS
Years ended January 31, 2015 and 2014




 January 31, 2015 


 January 31, 2014 







Operating activities






Net income


$

1,395,069

$

525,199

Adjustments for:







Income tax expense



627,571


201,476


Finance costs



535,110


692,156


Depreciation and amortization of property, plant and equipment and intangibles



3,146,717


2,995,060


Gain on disposal of property, plant and equipment



(436,365)


(29,331)


Share-based payments



121,521


194,588


Change in non-cash working capital related to operations



(969,392)


(979,470)

Less:







Interest paid



(460,496)


(595,734)

Cash provided by operating activities



3,959,735


3,003,944







Investing activities







Purchase of property, plant and equipment



(1,968,373)


(2,982,916)


Construction deposit paid



(1,478,220)


-


Proceeds from sale of property, plant and equipment, net



3,370,397


206,500


Purchase of intangible assets



(379,992)


(503,772)

Cash used in investing activities



(456,188)


(3,280,188)







Financing activities







Decrease in bank indebtedness



(1,694,178)


(620,036)


Issuance of long-term debt



-


1,578,543


Repayment of long-term debt



(1,566,293)


(3,515,157)


Issuance of shares



26,900


30,781


Proceeds from stock option exercise



325,000


-


Proceeds from warrants, net



-


2,802,113

Cash provided by (used in) financing activities



(2,908,571)


276,244







Net increase in cash



594,976


-







Cash, beginning of period



-


-







Cash, end of period


$

594,976

$

-







Non-cash investing and financing activities:






Acquisition of assets under finance lease


$

1,313,921

$

-

Additional Information

For further details the Company's complete management discussion and analysis (MD&A) and financial statements for the year ended January 31, 2015 will be available on the investor section of the Brick Brewing website at www.brickbeer.com. This and additional information relating to the Company, including its Annual Information Form, is or will be available on the Company's website and on SEDAR at www.sedar.com.

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 British Retail Consortium (BRC) Global Standards for Food Safety, 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 brand premium craft beers with other popular brands such as Laker, Red Baron, Red Cap and Formosa Springs Draft.  In March 2011, Brick purchased the Canadian rights to Seagram Coolers and now produces, sells, markets and distributes Seagram Coolers across Canada.  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.

SOURCE Brick Brewing Co. Limited

For further information: Sean Byrne, Chief Financial Officer, Tel: (519) 742-2732 Ext.132; E-mail: info@brickbeer.com

RELATED LINKS
http://www.brickbrewing.com

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