Brick Brewing reports financial results for the second quarter, with EBITDA of $1.3 million and net income of $461 thousand

    WATERLOO, ON, Sept. 9 /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 second quarter of fiscal 2010.
    "The emerging story for this year is the overwhelming success of Red
Baron and organizational change that is tangible", said George Croft,
President & CEO. "Great things are happening at Brick and I am pleased to
report encouraging results."
    Packaged volume of Red Baron increased dramatically in the quarter, a
continuation of first quarter success. The new management team has
demonstrated brand building capability through the success of Red Baron. This
growth has reduced the Company's reliance on the Laker brand. Despite a very
challenging competitive environment, Brick brands have kept pace with the
industry. Brick's total brand volume declined by 1.5% on a year-to-date basis
versus an industry decline of 1.4% in the same period.

    Financial highlights for the quarter include:

        -  Net revenue growth of 7.4% compared to the second quarter of
           fiscal 2009 and 5.9% on a year-to-date basis;
        -  Gross profit percentage has increased to 26.7% for the first six
           months of fiscal 2010 versus 21.0% in the comparable period of
           fiscal 2009;
        -  EBITDA(*) for the second quarter and first six months of fiscal
           2010 of $1.30 million and $2.46 million, respectively,
           representing an increase of $767 thousand (141.8%), and $1.5
           million (169.0%);
        -  Net income of $461 thousand in the second quarter, compared to $30
           thousand last year; and
        -  Net income of $892 thousand for the first six months of fiscal
           2010 compared to a loss of $48 thousand in the same period last

    The Company continues to make great strides in aligning itself with the
strategic pillars:

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

    Waterloo Dark and Waterloo Wheat brands have continued to grow (79% in the
quarter). Red Baron is exceeding management's expectations and the initial
reaction to Red Baron Lime is exciting.

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

    The Company is positioned to deliver the $2 million of cost savings that
was previously announced. Gross profit percentage has increased by 5.7% for
the year-to-date. Despite incurring additional legal costs, the selling,
marketing and administrative expenses have declined by $244 thousand so far
this year. Severance costs have declined by $186 thousand to-date in fiscal

    - Growing in the most profitable channels and geographic markets

    In order to maximize margin, the Company needs to focus its energy and
resources. Brick no longer delivers product directly to licensees, but instead
uses The Beer Store ("TBS") system to meet the on-premise demand. The highest
selling skus are sold primarily through the TBS channel, which has lower
distribution fees than the LCBO. Red Baron Lime is currently distributed
exclusively to TBS locations.

    - Optimizing the Company's operating assets

    The Company's new Chief Technical Officer, Russell Tabata has hit the
ground running. He has spent the last few months visiting all facilities and
reviewing our long-term capital requirements. The Company will be formalizing
a long-term capital plan as part of the fiscal 2011 budget process.

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

    In June, the Company welcomed three new members to its Board of
Directors. Each of the new members comes with unique and valuable experience
in the areas of finance/accounting, law, and brewery operations. Many thanks
go to Ted Hastings, Perry Dellelce, and Larry Macauley for joining the Brick
team at this exciting point in the Company's history.
    "I share with you my enthusiasm resulting from a great start to fiscal
2010 and look forward to conveying results for the balance of 2010", said Mr.

                          Brick Brewing Co. Limited
                         Consolidated Balance Sheet

                                                       July 31,   January 31,
                                                          2009          2009
                                                                    - note 1)
    Current assets:
      Cash                                        $          -  $    209,291
      Accounts receivable                            3,498,658     2,096,781
      Inventories                                    6,579,367     5,309,474
      Prepaid expenses                                 482,038       507,518
      Future income taxes                              522,338       522,338
                                                    11,082,401     8,645,402

    Property, plant and equipment                   14,051,765    13,522,720
    Trademarks and listing fees                      5,669,953     5,401,314
    Deferred costs                                      87,876       108,067
    Other assets                                        35,000        50,000
    Future income taxes                                185,329       626,103
                                                    31,112,324    28,353,606

    Liabilities and Shareholders' Equity

    Current liabilities:
      Bank indebtedness                           $  1,080,247  $          -
      Accounts payable and accrued liabilities       5,374,587     3,846,187
      Current portion of long-term debt                928,500       924,000
      Current portion of obligations
       under capital lease                             134,758       419,282
      Deferred grants                                        -       270,758
                                                     7,518,092     5,460,227

    Long-term debt                                   1,824,443     2,067,900

    Shareholders' equity:
      Share capital                                 34,655,890    34,657,984
      Contributed surplus                              727,823       673,593
      Deficit                                      (13,613,924)  (14,506,098)
                                                    21,769,789    20,825,479
                                                  $ 31,112,324  $ 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
        second quarter of fiscal 2009 and the six months ended July 31, 2008
        were adjusted as follows: amortization expense has been reduced by
        $29 thousand and $58 thousand, and the opening deficit has been
        adjusted by $232,572 and $261,589 respectively.

                          Brick Brewing Co. Limited
             Consolidated Statement of Income (Loss) and Deficit

                             Three Months Ended           Six Months Ended

                           July 31,      July 31,      July 31,      July 31,
                              2009          2008          2009          2008
                                       (Restated                   (Restated
                                        - note 1)                   - note 1)

    Gross revenue     $ 19,656,483  $ 19,446,623  $ 35,423,279  $ 35,042,463
      Less production
       taxes and
       fees            (10,340,453)  (10,771,183)  (18,466,130)  (19,032,206)
    Net revenue          9,316,030     8,675,440    16,957,149    16,010,257

    Cost of sales        6,803,743     6,728,593    12,422,979    12,655,417
    Gross profit         2,512,287     1,946,847     4,534,170     3,354,840

     marketing and
     administration      1,188,433     1,273,721     2,054,876     2,299,638
    Earnings before
     the undernoted      1,323,854       673,126     2,479,294     1,055,202

     income (expense):
       and amortization   (589,816)     (400,101)   (1,054,803)     (792,469)
      Interest on
       long-term debt      (35,046)      (91,453)      (76,901)     (193,628)
       income (expense)          -           376         1,121        (1,542)
      Severance costs      (15,764)     (200,803)      (15,764)     (200,803)
    Equity earnings on
     investment                  -        68,982             -        64,214
                          (640,626)     (622,999)   (1,146,347)   (1,124,228)
    Income (loss)
     before income
     taxes                 683,228        50,127     1,332,947       (69,026)

    Future income
     tax provision
     (recovery)            222,413        19,692       440,773       (20,935)
    Net income and
     income                460,815        30,435       892,174       (48,091)

    Deficit, beginning
     of period         (14,074,739)   (6,959,783)  (14,506,098)   (6,852,240)
    Cumulative effect
     of adopting new
     policies, net
     of tax                      -      (232,572)            -      (261,589)
     beginning of
     period restated   (14,074,739)   (7,192,355)  (14,506,098)   (7,113,829)
     end of period     (13,613,924)   (7,161,920)  (13,613,924)   (7,161,920)
    Net earnings per share:
    Basic                     0.02          0.00          0.03          0.00
    Diluted                   0.02          0.00          0.03          0.00

                          Brick Brewing Co. Limited
                    Consolidated Statement of Cash Flows

                             Three Months Ended           Six Months Ended

                           July 31,      July 31,      July 31,      July 31,
                              2009          2008          2009          2008
                                       (Restated                   (Restated
                                        - note 1)                   - note 1)

    Cash provided by
     (used in):

      Income (loss)
       for the period      460,815        30,435       892,174       (48,091)
      Items not
       involving cash:
         of property,
         plant and
         costs and
         other assets      597,316       395,876     1,069,803       807,469
        Stock based
         compensation       24,142        28,248        48,936        43,529
        Equity earnings
         on long-term
         investment              -       (68,982)            -       (64,214)
        Future income
         tax provision
        (recovery)         222,413        19,692       440,773       (20,935)
      Change in
       working capital    (946,300)     (566,092)   (1,388,648)     (101,718)
                           358,386      (160,823)    1,063,038       616,040
      Increase (decrease)
       in bank
       indebtedness        903,406       751,486     1,080,247      (112,735)
      Repayment of
       long-term debt     (185,107)     (399,450)     (238,957)     (449,100)
      Repayment of
       obligation under
       capital lease      (251,875)      (30,678)     (284,524)      (74,554)
      Issue of capital
       stock (net of fees)       -        51,100         3,200        60,830
      Stock options
       exercised                 -             -             -       252,000
                           466,424       372,458       559,966      (323,559)
      Purchase of property,
       plant and equipment,
       listing fees and
       deferred assets    (824,810)     (211,635)   (1,832,295)     (292,481)
                          (824,810)     (211,635)   (1,832,295)     (292,481)
    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 July 31, 2009 will be
available on the investor section of the Brick Brewing website at Additional information relating to the Company, including
its Annual Information Form, is available there and on SEDAR at

    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


    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 September 8, 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 September 8, 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

    (*) 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 Croft, President & CEO, Tel: (519)
576-9519 x. 247, e-mail:

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