Canada: Brick Brewing Co. Ltd. reported net revenue up 39% in 2Q 2006

Brick Brewing Co. Limited released September 12 its second quarter financial results for the quarter ended July 31, 2006.

"In this quarter we continued to see strong demand for our brands with overall volumes up 35%," said Jim Brickman, Executive Chairman and Founder.

"We are also encouraged by the early consumer feedback received on our new J.R. Brickman Founder's Series of premium craft brewed beers launched late in the second quarter. We expect these beers will bring renewed enthusiasm for our premium portfolio of brands," Brickman added.

"I am very pleased we were able to achieve record quarterly financial performance despite the new Kitchener facility incurring temporarily higher operating costs and overheads than our recent historical performance," Doug Berchtold, President and CEO said. "We have made significant improvement there since Q1 and we will continue our focus on improving operating costs at Kitchener in future quarters in an effort to ensure continuing profit momentum at Brick," he added.

Second Quarter Financial Highlights

Net revenue for the second quarter increased to $11.4 million compared to $8.2 million for the same period last year, an increase of 39%. Beer output increased by 35% against the second quarter of 2005. Gross revenues increased 33% (figures in CA$ unless stated).

Net income before taxes was $1.46 million compared to $1.35 million in the second quarter last year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were $1.91 million compared to $1.66 million in the same quarter last year.

Cost of goods on a per unit basis for beer increased 9% or $559 thousand in the second quarter compared to last year due to higher operating costs related to the Kitchener ramp-up process.

Distribution fees paid to LCBO and TBS were reduced by 10% or $467 thousand in the second quarter this year compared to the same period last year as a result of increased direct delivery to retail stores.

Second Quarter Operational Highlights

During the quarter, the new Kitchener packaging facility steadily increased daily production but only achieved productivity levels similar to the Formosa facility subsequent to the end of the quarter.As a result, the Kitchener facility produced temporarily higher operating costs and overheads than recent historical performance. The Company still reduced its per unit manufacturing costs by 13% in the second quarter compared to the first quarter of fiscal 2007.

During the quarter, the Company introduced two new Laker can formats. Laker Lager in a 473ml can and Laker Light in a 355ml can. Laker can volumes experienced significant growth in the second quarter and can volumes now represent approximately 13% of the total Laker volumes.

Late in the second quarter the Company launched its new "J.R. Brickman Founder's Series" of premium brands. While this brand launch is in its early stages the product has been well received.

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