Canada: Brick Brewery beer sales up 23% during first quarter

Brick Brewing Co. Limited released June 13 its first quarter financial results for the quarter ended April 30, 2006. "In this quarter we continued to see strong demand for our brands with overall volumes up 23%," said Jim Brickman, Executive Chairman and Founder. "We are also looking forward to the launch of our new J.R. Brickman Founder's Series of premium craft brewed beers which we expect will bring renewed enthusiasm for our premium portfolio of brands," Brickman added.

"We are in the midst of managing a transition where we will strive to move from a successful small brewer to a competitive mid-size brewer," Doug Berchtold, President and CEO said: "Continuing the successful Kitchener start-up is the important element of this plan," Berchtold added.

First Quarter Financial Highlights

Net revenue for the first quarter increased to CA$7.7 million compared to CA$7.0 million for the same period last year, an increase of 10%. Beer volumes increased by 23% over the first quarter last year. Gross revenues increased 20% however marginal production taxes increased 13% or CA$629 thousand compared to the same quarter last year.

Net income before taxes was CA$190 thousand compared to CA$752 thousand in the first quarter last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) was CA$630 thousand compared to CA$1.05 million in the same quarter last year.

Cost of goods on a per unit basis for beer decreased 1% in the first quarter compared to last year. These cost reductions are attributable to the higher volumes and ongoing efficiencies in both production and distribution.

Distribution fees paid to LCBO and TBS were reduced by 6% or CA$195 thousand in the first quarter this year compared to the same period last year as a result of increased direct delivery to retail stores.

First Quarter Operational Highlights

During the quarter, trial production commenced at the new Kitchener packaging facility and the "ramp up" of this facility produced temporarily higher operating costs and overheads than recent historical performance. On April 20, the line was commissioned for ongoing production.

In the recent federal budget the government announced that effective July 1, 2006 the excise tax rate for annual production over 75,000 hectolitres would increase and excise tax rates for annual production below that level would be reduced. The overall impact of this change for Brick will be a permanent reduction in the excise tax payable of CA$763 thousand annually.

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