Brick Brew­ing earns $1.02M in Q3, boosts div­i­dend

Stockwatch Daily - - CONSUMER GOODS - Mr. David Birch re­ports

BRICK BREW­ING Co. Ltd. has re­leased re­sults for the third quar­ter ended Oct. 28, 2018. Net rev­enues for the third quar­ter of fis­cal 2019 grew to $14.2mil­lion, up from $11.7mil­lion in the third quar­ter of fis­cal 2018. Gross profit mar­gins for the quar­ter in­creased to 28.1 per cent ver­sus 26.5 per cent in the third quar­ter of the prior year. Mar­gin ex­pan­sion was sup­ported by strong pric­ing, en­hanced prod­uct mix as well as over­all cost re­duc­tions in op­er­a­tions. EBITDA (earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­za­tion) for the third quar­ter of fis­cal 2019 im­proved to $2.8-mil­lion, re­flect­ing an ac­cel­er­a­tion of strong re­sults in fis­cal 2019.

“This was a tremen­dous quar­ter for Brick Brew­ing,” noted Ge­orge Croft, pres­i­dent and chief ex­ec­u­tive of­fi­cer. “We’re re­port­ing dou­ble-digit rev­enue and EBITDA growth. We’ve been able to ex­pand mar­gins, in­crease the in­vest­ment in our brands, and still de­liver 55-per-cent growth in EBITDA. Our Laker brand

posted 4-per-cent vol­ume growth and our LandShark brand con­tin­ued to res­onate with con­sumers and grew 6 per cent in the quar­ter. Our Water­loo brands de­clined 8 per cent in the face of craft beer pro­lif­er­a­tion and strong com­pet­i­tive cat­e­gory pres­sure. The Water­loo brand will ben­e­fit con­sid­er­ably from our re­cently an­nounced small-batch brew­ery and tap­room where we can show­case our new ex­pertly crafted in­no­vated prod­ucts. Over all, the beer in­dus­try saw a de­cline of 5.9 per cent ver­sus prior year. In com­par­i­son, our owned beer busi­ness grew 2 per cent ver­sus prior year, for the quar­terly com­par­i­son. We have been suc­cess­ful in grow­ing mar­ket share, and the strong re­sponse we’ve en­joyed from our con­sumers has al­lowed us to out­per­form the cat­e­gory.”

As a re­sult of the strength in op­er­at­ing and fi­nan­cial per­for­mance, Brick is also an­nounc­ing to­day a 25-per-cent in­crease in the quar­terly div­i­dend, to 2.5 cents/share, up from two cents/share. The div­i­dend is payable Jan. 29, 2019, to share­hold­ers of record as of Jan. 15, 2019. “The in­crease in the div­i­dend is sim­ply a con­tin­u­a­tion of our com­mit­ment to de­liver value to share­hold­ers. We be­lieve in our abil­ity to both in­vest in grow­ing our busi­ness while at the same time in­creas­ing re­turns to share­hold­ers,” com­mented David Birch, chief fi­nan­cial of­fi­cer.

Mr. Croft added: “Al­though we are pleased with our third quar­ter re­sults, we will con­tinue to fo­cus on ex­e­cu­tion and will be work­ing hard to en­sure a strong fin­ish for the year. Ad­di­tion­ally, we are ex­cited about our re­cently an­nounced strate­gic di­rec­tion to en­gage in the new and de­vel­op­ing cannabis-in­fused bev­er­age cat­e­gory and its im­pact on our fu­ture busi­ness.”

The fi­nan­cial in­for­ma­tion in the as­so­ci­ated ta­ble should be read in con­junc­tion with the au­dited an­nual fi­nan­cial state­ments of the com­pany pre­pared un­der IFRS (in­ter­na­tional fi­nan­cial re­port­ing stan­dards) for the year ended Jan. 31, 2018.

(See BRB Ta­ble 1 on page 41)

About Brick Brew­ing Co. Ltd.

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.

We seek Safe Har­bor.

John Harry Bowey, Ge­orge H Croft, Stan­ley Ge­orge Dun­ford, Ed­ward Hume Ker­naghan, Peter John Schwartz, David Robin­son Shaw

(BRB) Shares: 35,468,164

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