Canada: Brick Brewing reports record annual performance for the year ended January 31, 2006

Brick Brewing Co. Limited released on April 25 its record annual results for the year ended January 31, 2006. Beer volumes up 39%, Net income increases to record $4.8 million for the year ended January 31, 2006.

"We are very pleased with the progress of our business and the resulting record annual financial performance for the Company," said Jim Brickman, Executive Chairman and Founder. "The continued shift in the industry towards value continues to provide Brick with the opportunity for further sustained growth and profitability," Brickman added.

Doug Berchtold, President and CEO said: "While the fourth quarter was a challenge financially due to the myriad of operational improvements underway we expect that the changes being made to reshape our operations will reduce structural operating costs and allow us to better execute in both the manufacturing and distribution of our products. We will continue to sustain our aggressive focus on reducing structural operating costs while improving the availability of our products."

Fourth Quarter Financial Highlights

Quarterly Comparison

- Net revenue for the fourth quarter ended January 31, 2006 increased to $6.4 million compared to $4.9 million for the same period last year, an increase of 31%. Beer volumes increased by 12% over the fourth quarter last year.

- Net income for the quarter was a record $1.7 million, after a $2.1 million income tax recovery, compared to $220 thousand in the fourth quarter last year.

- Earnings before interest, taxes, depreciation and amortization (EBITDA) in the fourth quarter was $217 thousand before adjusting $369 thousand for one-time write-down of bottle inventory compared to a loss of $21 thousand before adjusting $379 thousand for a one-time production tax decrease for the same quarter last year.

- Cost of goods on a per unit basis for beer increased 2% in the fourth quarter compared to last year. These cost increases in the quarter are attributable to increased costs associated with the new Kitchener facility and an increased investment in customer service activities in order to better execute delivery of products directly to The Beer Store and LCBO stores.

Annual Financial Highlights

- Net revenue for the year ended January 31, 2006 increased by 33% to $30.2 million compared to $20.8 million for the same period last year before a one-time reduction last year of $929 thousand in production taxes. Beer volumes increased by 39% over last year.

- Net income for the year was a record $2.7 million before a $2.2 million recovery for income taxes, compared to $1.9 million last year.

- Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 15% to $3.9 million in the year, compared to $3.4 million last year.

- Cost of goods on a per unit basis for beer decreased 13% in the year compared to last year.

Fourth Quarter Operational Highlights

- In the fourth quarter of this year due to increased industry pricing net revenues increased by $934 thousand over the fourth quarter last year. Effective October 2005 the Government of Ontario increased the social reference price for beer to $26.40 per case of 24 bottles including deposit. This is the minimum price at which brewers can sell beer to consumers.

- In the fourth quarter the Company's per unit cost of goods sold increased by 2% over the same period last year. During the quarter the Company consolidated and increased its customer service activities in an effort to better execute delivery of its products directly to The Beer Store and LCBO stores as opposed to central warehouses. The Company successfully reduced transfer fees paid to LCBO and The Beer Store by 15% or $386 thousand over the fourth quarter last year.

- During the fourth quarter the Company continued the installation of its new Kitchener packaging line, which is now in the final stages of its commissioning.

- In the fourth quarter the Company's EBITDA performance was adversely affected by transitional costs pertaining to the new Kitchener packaging facility, a one-time write-down of bottle inventories and increased investment spending in marketing, selling and customer service activities.


Brick Brewing Co. Limited is a regional brewer of award winning premium quality beers. The Company, founded by Jim Brickman 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 successful line of premium craft beers with other popular brands such as Laker, Red Cap and Formosa Springs Draft. Brick trades on the TSX under the symbol BRB. Visit us at www.brickbeer.com.

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