Canada: Brick Brewing reports seventh consecutive record quarterly performance

Brick Brewing Co. Limited announced on December 13 its seventh straight record quarterly financial results for the third quarter ended October 31, 2005.

"The sustained shift in consumer demand toward value beer continued to drive strong growth and record financial performance for the Company," said Jim Brickman, Executive Chairman and Founder. "The value segment appears to have staying power and the Laker brand family has become a leading participant in the category," Brickman added.

Doug Berchtold, President and CEO said: "While we enthusiastically celebrate our continuing success we cannot be content. We must sustain our aggressive focus on reducing structural operating costs in order to continue to build on our strong financial performance."

Third Quarter Financial Highlights

Quarterly Comparison

- Net revenue for the third quarter ended October 31, 2005 increased to $8.6 million compared to $6.9 million for the same period last year, an increase of 24%. Beer volumes increased by 31% over the third quarter last year.

- Net income for the quarter was a record $1.03 million compared to $684 thousand in the third quarter last year, an improvement of 51 % or $349 thousand.

- Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 34% to $1.37 million in the third quarter, compared to $1.02 million after adjusting $392 thousand for a one-time tax decrease for the same quarter last year.

- Cost of goods on a per unit basis for beer decreased 6% in the third quarter compared to last year. These cost reductions are attributable to the higher volumes and ongoing efficiencies in both production and distribution.

First Nine Months Financial Highlights

- Net revenue for the nine months ended October 31, 2005 increased to $23.8 million compared to $17.4 million for the same period last year, an increase of 37%. Beer volumes increased by 49% over the same period last year.

- Net income for the first nine months was a record $3.1 million compared to $1.7 million in the same period last year, an improvement of 88%.

- Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 34% to $4.08 million in the first nine months, compared to $3.05 million for the same period last year.

- Cost of goods on a per unit basis for beer decreased 9% in the first nine months ending October 31, 2005 compared to the same period lastyear.

Third Quarter Operational Highlights

- Effective October 2005 the Government of Ontario increased the social reference price for beer to $26.40 per case of 24 bottles. This is the minimum price at which brewers can sell beer to consumers. This increased floor price will provide the Company with enhanced price and margin stability in the future.

- For most of the third quarter retail demand for the Company's products continued to exceed production capabilities. As a result field inventory levels of the Company's products at LCBO and TBS were below optimum levels. With its planned capacity additions the Company is seeking to address future capacity constraints.

- During the quarter the Company completed the construction of a 100,000 square foot central warehouse in Kitchener, Ontario. The Company is adding a packaging line to this facility which is expected to be available in the spring of 2006.

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