CALGARY, ALBERTA--(Marketwired - Aug. 7, 2014) - Big Rock Brewery Inc. (TSX:BR) ("Big Rock" or the "Corporation") announced its financial results today for the three and six months ended June 30, 2014.
The Corporation reported a net income of $276 thousand and a loss of $34 thousand for the three and six months ended June 30, 2014, respectively, as compared to net income of $1,369 and $1,461 for the same periods in 2013. These results are attributed to a reduction in sales volumes. Reported sales volumes decreased 9.1% to 46,597 hectolitres ("hl") for the second quarter of 2014 as compared to 51,266 hl for the same quarter of 2014. Sales volumes decreased 13.6% to 80,698 hl for the six months ended June 30, 2014 compared to 93,364 hl for the same six month period in 2013. Excluding the impact of the discontinuance of certain products and the discontinuance or delayed introduction of certain package configurations, the volume decrease for the three and six months ended June 30, 2014 would be 482 hl (1.0%) and 6,088 hl (7.6%), respectively.
"Our transition back to the innovation and premium quality that was, for many years, the hallmark of our brand is on schedule," said Bob Sartor, CEO. "The discontinuance of beers that do not fit our brand represented over half of our volume loss. While there is no doubt that the intense competition and open market in Alberta has impacted our volume, particularly for our original beers such as Grasshopper Wheat Ale and Traditional Ale, we will be launching several new full-time beers starting early in the fourth quarter of 2014 and into 2015, which will begin to replace the discontinued beer volume with better, higher margin product."
With respect to the Big Rock expansion into British Columbia, Mr. Sartor commented, "Our brewery construction in Vancouver is ongoing and we have finalized a completely new and creative line up of full-time and seasonal beers for the B.C. market for the fourth quarter of 2014 and for 2015. Permitting delays have pushed back our planned opening date and we are now anticipating an opening date in the early part of the fourth quarter. Once the Vancouver brewery is operational, we will look to other markets for expansion. Work is already underway in this regard."
Financial and Operating Highlights
- Volume growth occurred in premium-priced brands, including Fowl Mouth ESB-Big Rock's best- selling Brewmaster's Edition beer to date which ended its limited run in April. Big Rock's latest Brewmaster's Edition beer, Rhine Stone Cowboy, has also enjoyed an enthusiastic market response, having outsold its 2013 equivalent, Rosmarinus, over 2-to-1 in its first two months;
- New products and initiatives introduced subsequent to the first quarter have provided incremental sales volumes with partial benefit in the second quarter and are expected to provide full benefit in the third quarter;
- The Corporation released five limited edition beers and two limited edition ciders in the second quarter (for a total of 11 products in the first six months of 2014) and expects to release 14 additional limited edition products during the remainder of 2014; and
- Selling costs for the three months ended June 30, 2014 were higher than the same period in 2013 due to timing differences compared to 2013, particularly relating to sponsored events and new merchandise developed in accordance with Big Rock's recent rebranding.
| |
| Financial and Operating Highlights Table |
| |
| |
Three months ended |
Six months ended |
| |
June 30 |
June 30 |
| $ thousands (unless otherwise stated) |
2014 |
2013 |
2014 |
|
2013 |
| Sales volumes (hectolitres or hl) |
|
46,597 |
|
51,266 |
|
80,698 |
|
|
93,365 |
| Net revenue |
|
10,414 |
|
11,635 |
|
17,561 |
|
|
20,639 |
| Operating profit (loss) |
|
342 |
|
1,806 |
|
(78 |
) |
|
1,935 |
| Net income (loss) |
|
276 |
|
1,369 |
|
(34 |
) |
|
1,461 |
| Earnings (loss) per share (basic and diluted) |
$ |
0.04 |
$ |
0.22 |
$ |
(0.01 |
) |
$ |
0.24 |
Additional Information
The Financial Statements and Management's Discussion and Analysis dated August 7, 2014 can be viewed on Big Rock's website at http://bigrockbeer.com/sites/default/files/2014q2.pdf and on SEDAR at sedar.com under Big Rock Brewery Inc.
Forward-Looking Information
Certain statements contained in this news release constitute forward-looking statements. These statements relate to future events or Big Rock's future performance. All statements, other than statements of historical fact, may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "plans", "expects", "intends" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Big Rock believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this News Release not be unduly relied upon by investors as actual results may vary materially from such forward-looking statements. These statements speak only as of the date of this News Release and are expressly qualified, in their entirety, by this cautionary statement.
In particular, this News Release contains forward-looking statements pertaining to the following:
- the number of additional limited edition products to be released;
- the success of new products and initiatives in the third and future quarters;
- the expectation that the new brewery in British Columbia will be operational within the fourth quarter;
- the timing of new products and initiatives and the extent to which they will provide incremental sales volumes; and
- the expectation for expansion in other markets.
With respect to the forward-looking statements listed above and contained in this News Release, management has made assumptions regarding, among other things:
- new products and services introduced will result in incremental sales volumes; and
- permitting and other construction activities will be able to be secured and/or completed within expected timeframes.
Some of the risks which could affect future results and could cause results to differ materially from those expressed in the forward-looking information and statements contained herein include, but are not limited to:
- the inability to secure the requisite regulatory approvals to market the full production of the new facility in British Columbia within the timeframe indicated; and
- the inability to secure and complete construction services for the new facility within the timeframe indicated.
Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking information and statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking information and statements included in this News Release are made as of the date hereof and Big Rock does not undertake any obligation to publicly update such forward-looking information and statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
About Big Rock Brewery Inc.
Big Rock Brewery Inc. produces premium, all-natural craft beers. Big Rock has a family of eight permanent ales and lagers, Rock Creek Cider®, an ongoing selection of seasonal beers released through the Brewmaster's Limited Edition and cutting-edge, small-batch brews released through the Alchemist Edition.