Gross Revenue Growth Accelerates to 44.5 Percent
Net Income of US$0.02 Per Share
VANCOUVER, British Columbia, June 26, 2006 (PRIMEZONE) -- Leading Brands, Inc. (Nasdaq:LBIX), North America's only fully integrated premium beverage company, announces results for the first quarter, which ended May 31, 2006. All financial amounts denominated in U.S. dollars.
Net Income for the quarter was $265,000, or $0.02 per share, versus net income of $300,000 or $0.02 per share in Q1 of last year. Gross Revenue for the quarter was $13,234,000, versus $9,156,000 in Q1 of the prior year, an increase of $4,078,000. U.S. dollar quarter over quarter revenue growth accelerated to 44.5%, eclipsing the pace of 35% set in the last half of fiscal 2005.
Discounts, rebates and slotting fees rose from $225,000 in Q1 of 2005 to $1,127,000 this quarter, an increase of more than $900,000, or 400%. These higher amounts were directly related to new slotting fees and promotions supporting the launch of, and expanding distribution for, TrueBlue(r) and the Company's other brands. EBITDA for the quarter was approximately $800,000, after deducting more than $125,000 in non-cash stock based compensation charges. Increases in SG&A costs were mostly due to higher sales and marketing charges associated with the growth of the Company's branded products.
Leading Brands Chairman and CEO Ralph McRae said: "I am extremely pleased with the pace at which our sales continue to grow. When you reflect upon the fact that we are still a relatively small company in an extremely large industry the potential for additional growth is really quite amazing. What I am perhaps most excited about is that we were able to generate a profit and material positive cash flow despite continuing to invest heavily in new listings and promotions. I credit this to the strength of our Integrated Distribution System(tm)."
Mr. McRae continued: "With our introduction of Caesar's(r) Cocktail Mix into the U.S. and the recent North American-wide launch of TREK(r) Natural Sports Drinks and NITRO(tm) Energy Drinks we are looking to increase our momentum through the prime Summer selling season. We continue to expand the presence of TrueBlue(r) in both the United States and Canada and have added regional sales managers in the U.S. northeast and midwest to direct our business there and increase the presence of our brands in those markets."
Mr. McRae concluded: "I truly hope that these results and developments are ultimately reflected in the market capitalization of our Company, which I believe to be significantly undervalued when compared with other publicly traded beverage firms."
In conjunction with this release, you are invited to listen to the Company's conference call, which will be held on Monday, June 26, 2006, at 8:00 am, Pacific Time, (11:00 am Eastern Time), with Ralph McRae, Chairman and CEO of Leading Brands, Inc.
TO PARTICIPATE IN THE CONFERENCE CALL PLEASE DIAL-IN:
1-416-850-9143
If you are unable to participate during the live conference call, the call will be archived for 7 days. To hear a replay of the call, please dial 1-402-220-1578 and reference the passcode 2150435.
About Leading Brands, Inc.
Leading Brands, Inc. (Nasdaq:LBIX) is North America's only fully integrated premium beverage company. The Company's unique Integrated Distribution System (IDS)(tm) offers turnkey, one-stop shopping to food and beverage brand owners, including manufacturing, distribution, sales/marketing and licensing. In addition, Leading Brands produces their own line of beverages such as TrueBlue(r), LiteBlue(r), TREK(r) Sports Drink, Nitro(tm) Energy Drink, Soy2O(r), Country Harvest(r) Juices, Caesar's(r) Bloody Caesar Cocktails and Infinity(tm) Sparkling Mountain Spring Water.
Forward Looking Statements
Certain information contained in this press release includes forward-looking statements. Words such as "believe," "expect," "will," or comparable terms, are intended to identify forward-looking statements concerning the Company's expectations, beliefs, intentions, plans, objectives, future events or performance and other developments. All forward-looking statements included in this press release are based on information available to the Company on the date hereof. Such statements speak only as of the date hereof. Important factors that could cause actual results to differ materially from the Company's estimations and projections are disclosed in the Company's securities filings and include, but are not limited to, the following: general economic conditions, weather conditions, changing beverage consumption trends, pricing, availability of raw materials, economic uncertainties (including currency exchange rates), government regulation, managing and maintaining growth, the effect of adverse publicity, litigation, competition and other risk factors described from time to time in securities reports filed by Leading Brands, Inc.
We Build Brands(tm)
This news release is available at www.LBIX.com
LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(EXPRESSED IN UNITED STATES DOLLARS) May 31 May 31
2006 2005
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Gross sales $ 13,234,308 $ 9,155,742
Less: Discounts, rebates and
slotting fees (1,127,410) (225,468)
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Net sales 12,106,898 8,930,274
Expenses (Income)
Cost of sales 8,532,485 5,892,078
Selling, general & administration
expenses 2,776,319 2,213,487
Depreciation and amortization 225,816 228,532
Interest expense 125,768 78,696
Other expense (income) -- (257)
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Total Expenses 11,660,388 8,412,536
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Net income before taxes 446,510 517,738
Less: Income tax expense 181,667 217,302
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Net Income after income taxes 264,843 300,436
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Deficit, beginning of period (19,010,186) (17,734,758)
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Deficit, end of period $(18,745,343) $(17,434,322)
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EARNINGS PER SHARE
Basic $ 0.02 $ 0.02
Diluted $ 0.02 $ 0.02
Weighted average number of shares
outstanding 15,114,322 15,045,069