E-Malt.com News article: Canada: Brick Brewing reports sixth straight record quarterly performance
Brick Brewing Co. Limited released on September 13 its sixth straight record quarterly financial result for the second quarter ended July 31, 2005.
"It has been an exceptional summer for selling beer this year and we were fortunate to have the resources in place to capitalize on this additional volume," said Jim Brickman, Executive Chairman and Founder.
Doug Berchtold, President and CEO said: "As we expect this trend to continue, particularly with the success of our value price strategy, increased production capacity will be added by next spring to allow for future growth. Our investments in additional production capacity will not only allow us to grow our volumes but will also provide a permanent reduction in our variable manufacturing costs."
Second Quarter Financial Highlights
-Net revenue for the second quarter ended July 31, 2005 increased to C$ 8.2 million compared to C$ 6.5 million for the same period last year, an increase of 27%. Beer volumes increased by 31% over the second quarter last year.
Net income for the quarter was a record C$ 1.35 million compared to C$ 832 thousand in the second quarter last year, an improvement of 62% or C$ 518 thousand.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 40% to C$ 1.66 million in the second quarter, compared to C$ 1.19 million for the same quarter last year.
Cost of goods on a per unit basis for beer decreased 12% in the second quarter compared to last year. These cost reductions are attributable to the higher volumes and ongoing efficiencies in both production and distribution.
Second Quarter Financial Review
-During the second quarter the Company's beer volumes increased 31% over the second quarter last year. The Company's mainstream brand volumes grew by 102% as consumers continued to purchase both Red Cap and Formosa Springs in a 28 pack size priced at C$ 29.95 plus deposit. Laker continued its positioning as the everyday BUCK A BEER and volumes increased again by 36% in the quarter over the same quarter last year. The licensed brands for Big Rock and PC(R) also grew in the quarter by 16% compared to the same period last year. The Company's premium brands declined 9% due to limited promotional support while management continued to review the potential marketing strategies.
-Due to sustained warm and dry summer weather in Ontario, the seasonal sales demand exceeded the Company's production capacity in the second quarter. As a result, the Company moved up its plans to expand its packaging capabilities by adding a packaging line to its new warehouse building now under construction in Kitchener, Ontario. When operational, this facility is anticipated to be a major factor in achieving the goal of reducing the Company's variable costs by more than C$ 2.0 million per year at current volumes. The additional packaging capacity in Kitchener is expected to be available in March 2006.
-In July the Company entered into a sales agency agreement with High Falls Brewing Co. of Rochester, New York to represent its imported brands in Ontario. Additionally, High Falls began to produce Laker Lager in cans for launch into the Ontario market. Both these initiatives have been well received by Ontario consumers.
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.
16 September, 2005