E-Malt.com News article: 3571

Canada, Calgary: Big Rock Brewery Income Trust (the "Trust") reported on November 1, 2004 to Unitholders its unaudited consolidated financial results for the three month and nine month year-to-date periods ended September 30, 2004. These results reflect the consolidated operations of the Trust, Big Rock Brewery Ltd. and its wholly owned subsidiaries Kamloops Brewery Ltd. and Whistler Brewing Company Ltd. Financial Highlights for the three and nine months ended September 30, 2004 compared with the same periods for 2003 are as follows: Despite a very cool and wet summer in our major markets Big Rock achieved an increase in net income for the quarter in comparison to the quarter ended September 30, 2003.

Net income for the quarter ending September 30, 2004 was $1,861,971 compared to $1,770,302 in the same quarter last year. This 5% increase is due primarily to a positive shift in sales mix from value to premium brands. Year-to-date net income increased by 43% from $3,852,543 to $5,499,224. Earnings per unit for the three months ending September 30, 2004 were $0.32 compared to $0.32 per unit for the same period last year. Year-to-date earnings per unit were $0.95 compared to $0.70 per unit last year.

Effective September 30, 2004 the monthly unit distribution was increased from $0.08 to $0.09. During the quarter, cash distributions of $1,391,750 ($0.24/unit) were paid to Unitholders, all of which are taxable in their hands. Cash distributions of $1,000,776 ($0.18/unit) were paid to Unitholders in the quarter ended September 30, 2003. Year-to date cash distributions were $3,830,420 (2003 - $2,552,470).

Gross sales revenue decreased to $12,881,963 during the three months ending September 30, 2004 from $12,969,097 for the same period last year. This slight decrease resulted from a price-induced volume decrease in value priced brands mitigated by a sales increase in premium brands. Year-to-date sales revenue is up 13% to $38,316,582 from $33,924,049.

Cost of sales decreased from $3,561,160 for the three months last year to $3,454,347 for the three months ending September 30, 2004 (3%). Cost of sales as a percentage of sales was 27% for the three months ending September 30, 2004 consistent with same period last year. The year-to-date cost of sales increase from $9,565,263 to $10,726,391 (12%) is consistent with the year-to-date increase in sales volume.

Selling expenses for the quarter decreased by $58,327 (2%) from $2,891,808 last year to $2,833,481 this year. Spending on marketing programs, sponsorships and delivery were lower this quarter compared to the same quarter last year. Year-to-date selling expenses increased by 7% to $8,495,242 for the nine months ended September 30, 2004 from $7,895,537 for the same period last year.

During the quarter ending September 30, 2004, general and administrative expenses increased to $973,044 from $872,550 the previous year. Increases in public filing costs and business and property taxes are primarily responsible for the increase. Year-to-date general and administrative costs were up by $175,646 to $2,922,222 this quarter compared to $2,746,576 last year.

Interest expense decreased from $94,251 last year to $23,234 this year for the three months ended September 30 and decreased from $250,958 to $117,555 for the nine months ended September 30. These decreases result from the reduction in long term debt.

Amortization for the three months ended September 30, 2004 was $468,494 compared with $434,008 for the quarter ended September 30, 2003. The increase is due to the addition of capital assets including the purchase of additional kegs, improvements to the canning and bottling lines and inventory management software upgrades.

For the quarter ending September 30, 2004 current income tax expense is $149,569. Future income tax expense for the quarter ended September 30, 2004 is $354,339 a decrease of $142,426 from the same quarter last year. Overall income tax expense has increased from $374,081 to $503,908. The effective income tax rate for the quarter is 21%. A current income tax recovery of $122,684 was booked for the quarter ended September 30, 2003.


03 November, 2004