E-Malt.com News article: 2507

Canada: Brick Brewing Co. Ltd., The Waterloo, Ont.-based company announced on April 15 it earned a small profit for its just completed fiscal year. Rising sales helped the craft brewer reverse a loss in the previous year, according to The Canadian Press. Brick Brewing Co. Ltd earned C$92,000, or one cent per share, for the year ended Jan 31. That compared with a loss of $2.3 million, or 18 cents a share, for the previous year. Annual sales revenues rose 12 % to C$21.3 million (US$15.86m) versus C$18.9 million a year before.

Volumes of Brick premium brands were up by 1.5% for the year. Sales of the Laker brand portfolio grew by 96% in the year, due to a strategic price repositioning initiated in September 2003, reducing the price of Laker Lager to $24 per case of 24 bottles. This lower price produced significant volume growth in the Laker Lager brand, tempering seasonally lower co-packing volumes during the second half of the fiscal year.

As a result of the increased Laker Lager sales, sales revenues in the fourth quarter ending 31 January 2004 increased to $5.2m, compared to $3.0m for the same quarter last year, an increase of 69%.

Earnings before interest, taxes, amortization and unusual items were $47,000 for the quarter compared to a loss of $1.5m for the same quarter last year. Net loss for the fourth quarter was $180,000 compared to a net loss of $2.35m year-on-year.

Earnings in 2004 before interest, taxes, amortization and bottle dispute and severance costs hit $1.5m in 2004 from a loss of $311,000 in fiscal 2003. The company's net earnings were $92,000 for the year ended 31 January 2004 compared to a net loss of $2.3m in the previous year.

The company also revealed it is renegotiating its finances with its bankers and plans to issue shares to raise new capital.
"While our fiscal 2004 profit is modest, it represents a dramatic reversal from the losses experienced in fiscal 2003," said Jim Brickman, president and founder of the company. "I am very optimistic about the company's prospects and with this year's business plan, we expect our financial performance to continue to improve."

For the fourth quarter, the company narrowed its losses to C$180,000 on sales of C$5.2 million, from a C$2.3-million loss on sales of just over C$3 million in the previous year's quarter. Brick said its sales growth reflected a jump in shipments of its Laker brand. While Brick improved its finances, the company still faced a C$3-million shortfall in working capital at the end of fiscal 2004, which means the company has breached its loan and mortgage agreements with its bankers.

Brick said its mortgage lender has waived compliance with the loan agreements and has agreed not to demand repayment of the mortgages before next Feb. 1. In addition, Brick has agreed to refinance its operating credit lines before July 31 and is "in advanced discussions" for alternative financing and plans a "significant" share issue.


21 April, 2004