Brick Brewing Reports Third Quarter EBITDA, ex one-time costs, of $1.8M

Third Quarter Highlights:

• Net revenue increased to $11.7 million, from $11.1 million in the prior year.
  
  
• Gross margin fell to 26.7%, and 28.1% excluding one-time costs, compared to 34.2% prior year.
  
  
• Selling, Marketing and Administration (“SM&A”) expenses were $2.2 million down slightly from $2.3 million in the prior year.
  
  
• EBITDA* of $1.7 million, and $1.8 million excluding one-time cost, compared to $2.0 million prior year.
  
  
• The Board of Directors approved in increase to the quarterly dividend, to $0.02/share, payable January 23, 2018 to shareholders of record as of January 9, 2018. The dividend is classified as an eligible dividend.

Year to Date Highlights:

• Net revenue increased to $39.1 million, from $34.6 million in the prior year.
  
  
• Gross margin was 28.6%, and 30.8% ex one-time costs, compared to 35.5% prior year.
  
  
• Selling, Marketing and Administration (“SM&A”) expenses increased slightly, to $7.0 million, vs. $6.9 million prior year.
  
  
• EBITDA* was $6.4 million and $7.2 million ex one-time cost, compared to $7.1 million in the prior year.

KITCHENER, Ontario, Dec. 08, 2017 (GLOBE NEWSWIRE) -- Brick Brewing Co. Limited (“Brick” or the “Company”) (TSX:BRB), Ontario’s largest Canadian-owned brewery, today released financial results for the third quarter ended October 29, 2017. Brick reported EBITDA excluding one-time costs of $1.8 million on net revenue of $11.7 million.

George Croft, Brick President and Chief Executive Officer commented, “While we are pleased with the market performance of our brands, it is clear that our margin and EBITDA results in the third quarter fell short. Commercially, the beer category was challenged by a cool, wet summer, one which drove industry volume lower. Despite the category volume declines, Laker grew 4% in the quarter, Waterloo was up 9%. The LandShark and Margaritaville family grew 27%, so the consumer facing result is positive. That said, internally, we faced some operating challenges in Q3.”

“Early in the quarter we completed as planned the installation of capital equipment associated with our Kitchener expansion and final phase of our supply chain consolidation project,” commented Russell Tabata, Brick’s Chief Operating Officer.  “The ramp up and commissioning of this equipment and the transition of production from our Formosa facility took until the end of Q3 to complete successfully.  As of the end of October, the new equipment is operating consistently at our targeted rates and we fully expect the operating performance of the facility to return to traditional performance and cost levels moving forward.”

Brick’s board of directors has also approved an increase to the quarterly dividend, to $0.02/share.  The dividend is payable January 23, 2018 to shareholders of record as of January 9, 2018.

Croft added, “Now that we have the Kitchener brewery operating at targeted levels and have fully consolidated our supply chain footprint, we are working hard to bring the year to a strong finish in the fourth quarter.  Our single source operating facility provides us with the optimal supply chain structure and we are on track to deliver the $600 thousand in annual cost savings related to this project and a return to historic margin levels.  We are now well positioned to compete in the competitive Canadian beer market and to serve our customers for the long term.”

STATEMENTS OF COMPREHENSIVE INCOME
Quarters ended October 29, 2017 and October 30, 2016

STATEMENTS OF FINANCIAL POSITION
As at October 29, 2017 and January 31, 2017

STATEMENTS OF CASH FLOWS
Quarters ended October 29, 2017 and October 30, 2016

About Brick Brewing

Brick is Ontario's largest Canadian-owned brewery. The Company is a regional brewer of award-winning premium quality and value beers and is officially certified under the Global Food Safety Standard, one of the highest and most internationally recognized standards for safe food production. Founded in 1984, Brick Brewing Co. 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 Waterloo premium craft beers with the popular Laker brand.  In 2011, Brick purchased the Canadian rights to Seagram Coolers and in 2015, secured the exclusive Canadian rights to both LandShark and Margaritaville. In addition, Brick utilizes its leading edge brewing, blending and packaging capabilities to provide an extensive array of contract manufacturing services in beer, coolers and ciders. Brick trades on the TSX under the symbol BRB. Visit us at www.brickbeer.com.

Forward-Looking Statements

All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements as of the date of this press release. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "seek", "plan", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, undue reliance should not be placed on these forward-looking statements, which are not guarantees and are subject to certain risks, uncertainties and assumptions, which may cause actual performance and financial results to differ materially from such forward-looking statements. The forward-looking statements included in this press release are made only at the date of this press release and, except as required by applicable securities laws, the Corporation does not undertake to publicly update such forward-looking statements to reflect new information, future events or otherwise.

* EBITDA is a non-IFRS earnings measure, therefore it does not have any standardized meaning prescribed by International Financial Reporting Standards  and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, depreciation and amortization, gain on disposal of property, plant, and equipment, and share based payments. Management uses this measurement to evaluate the operating results of the Company. This measure is also important to management since it is used by the Company’s lenders to evaluate the ongoing cash generating capability of the Company and therefore the amounts those lenders are willing to lend to the Company. Investors find EBITDA to be useful information because it provides a measure of the Company’s operating performance.

Contact Information
For further information:
Sean Byrne, Chief Financial Officer
(519) 742-2732 Ext. 132
E-mail: info@brickbeer.com