CALGARY, AB, July 29, 2021 /CNW/ - Big Rock Brewery
Inc. (TSX: BR) ("Big Rock" or the "Corporation")
today announced its financial results for the three and six months
ended June 30, 2021.
Financial Highlights
For the three months ended June 30,
2021, compared to the three months ended June 30, 2020, the Corporation reported:
- net revenue increased by 14.8%, from $11.9 million to $13.7
million;
- adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") of $2.0 million versus $2.5
million (see "Non-GAAP Measures");
- sales volumes decreased by 1.0% from 46,693 hl to 46,233
hl;
- net income of $0.8 million versus
net income of $0.6 million; and
- operating income of $1.1 million,
compared to operating income of $1.1
million.
For the six months ended June 30,
2021, compared to the six months period ended June 30, 2020, the Corporation reported:
- net revenue increased by 16.5%, from $20.9 million to $24.3
million;
- Adjusted EBITDA of $2.8 million
versus $2.5 million (see "Non-GAAP
Measures");
- sales volumes decreased 1.6% from 83,183 hl to 81,833 hl;
- net income of $0.3 million versus
net loss of $0.3 million; and
- operating income of $0.6 million,
compared to operating income of $0.1
million.
During the second quarter, the Corporation completed the
disposition of its Etobicoke
brewery for net proceeds of $2.1
million of which $1.1 million
were applied to settle outstanding lease obligations associated
with the disposed assets with the remaining proceeds used for
working capital and other general corporate purposes.
During the first half of 2021, the Corporation had drawn a
combined $4.5 million under its
credit facilities to fund its capital expansion program. As of
June 30, 2021, the Corporation had
$7.4 million drawn under its total
credit facilities of $16
million.
"Our ability to grow revenue as we have continued to navigate
the lock-down conditions throughout the first half of 2021 has been
a great win for the organization," said President & CEO
Wayne Arsenault. "We are very happy
with how our White Peaks product has been received in the market
since the launch earlier this year, and we look forward to
continuing our tradition of innovation. With the Etobicoke transaction completed, we are now
better enabled to focus on our core business while continuing to
service the Greater Toronto and
area markets via our Liberty Commons
location. As health restrictions continue to ease in our core
markets, we are looking forward to serving our consumers
on-premises and benefitting from the stronger margins that come
from kegs versus retail packaging. The strategic 2021 capital plan
remains on-plan and on-budget and we are excited to continue to
grow our capabilities as both an independent brewer and a co-pack
partner."
Operating Highlights
Big Rock reported a net income of $2.0
million or $0.11 per common
share, compared to a net income of $0.6
million or $0.08 per common
share in the second quarter of 2020. Adjusted EBITDA (see
"Non-GAAP Measures") decreased $0.6
million as compared to the second quarter of 2020. The
improvement in the Corporation's net income in the quarter was
driven by the following:
- growth in revenue from an increase in co-packing
arrangements;
- continued success in online retail sales, making up for the
short fall in restaurant revenue due to COVID-19 health
restrictions;
- the above was partially offset by higher costs of good sold
associated with the increase in packaging materials costs due to
the shift in sales mix from kegs to packaged goods, increased
filtration and cleaning costs related to the continuously changing
production mix, and increased utilities costs;
- selling expenses increased by $0.6
million compared to the same period in 2020 largely due to
an increase in distribution between provinces with increased
production in BC; and
- The Corporation did not receive any Canada Emergency Wage Subsidy ("CEWS")
payments during the second quarter of 2021, whereas results in the
comparative quarter included $0.8
million of CEWS.
Summary of Results
$000, except hl and
per share amounts
|
Three months ended
June 30
|
Six months ended June
30
|
|
2021
|
2020
|
2021
|
2020
|
Sales volumes
(hl)(1)
|
46,233
|
46,693
|
81,833
|
83,183
|
Gross
revenue
|
$
|
18,626
|
$
|
16,810
|
$
|
32,929
|
$
|
29,443
|
Net
revenue
|
13,690
|
11,926
|
24,289
|
20,854
|
Cost of
sales
|
8,312
|
7,095
|
15,399
|
12,951
|
Adjusted
EBITDA(2)
|
1,941
|
2,501
|
2,730
|
2,521
|
Operating
income
|
1,068
|
1,062
|
567
|
133
|
Net income
(loss)
|
786
|
570
|
331
|
(322)
|
Income (loss) per
share (basic and diluted)
|
$
|
0.11
|
$
|
0.08
|
$
|
0.05
|
$
|
(0.05)
|
$ per
hl
|
|
|
|
|
Net
revenue
|
$
|
296.11
|
$
|
255.41
|
$
|
296.81
|
$
|
250.70
|
Cost of
sales
|
$
|
179.78
|
$
|
151.95
|
$
|
188.17
|
$
|
155.69
|
(1)
|
Excludes co-packing
volumes due to the nature of the agreements.
|
(2)
|
Non-GAAP measure. See
"Non-GAAP Measures".
|
Outlook & Strategy
Big Rock's long-term growth strategy is defined by the following
three phases: 'Gear up', 'Fill up' and 'Drink up'. This strategy
supports the Corporation's vision to become Canada's largest independent brewer.
As the Corporation looks ahead to the third quarter and beyond,
the focus remains on the execution of its strategic 2021 capital
expansion and IT digital transformation plan. Preparation for the
new packaging equipment has been underway during the first half of
the year with the equipment expected to be delivered to the
Calgary facility early in the
third quarter where it will be installed, commissioned and ready
for use in the fourth quarter of 2021.
Meanwhile, the Corporation has commenced initiatives to broaden
its revenue streams by entering into certain distribution and sales
agency agreements which are expecting to continue to see growth
into the third quarter. In addition, the Corporation continues to
pursue new co-packing arrangements to fulfill anticipated available
capacity enabled by the capital expansion plan in the fourth
quarter of 2021. The Corporation has confidence that the capital
and IT upgrades will further enable the business to maximize
returns to deliver on its revenue growth strategy in 2022.
Big Rock looks forward to providing an update on the 2021
capital expansion and IT digital transformation plan following the
release of its third quarter results in early November
2021.
A complete discussion of the Corporation's vision and strategy
is included in the Q2 2021 Management's Discussion and Analysis and
investor presentation available on the Corporations website at
www.bigrockbeer.com or on SEDAR at www.sedar.com.
Additional Information
The interim condensed consolidated financial statements and
Management's Discussion and Analysis for the three and six months
ended June 30, 2021 dated
July 29, 2021, can be viewed on Big
Rock's website at www.bigrockbeer.com and on SEDAR at www.sedar.com
under Big Rock Brewery Inc.
Non-GAAP Measures
The Corporation uses certain financial measures referred to in
this press release to quantify its results that are not prescribed
by Generally Accepted Accounting Principles. This press release
contains the term "Adjusted EBITDA". This financial measure does
not have a standardized meaning under the Corporation's Generally
Accepted Accounting Principles and therefore may not be comparable
to similar measures presented by other issuers. The calculation of
Adjusted EBITDA is a non-GAAP measure, whose nearest GAAP measure
is net income, or net loss as applicable, with the reconciliation
between the two as follows:
($000, except where
indicated)
|
Three months
ended
June 30
|
Six months
ended June 30
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
Net income
(loss)
|
$
|
786
|
$
|
570
|
216
|
$
|
331
|
$
|
(322)
|
653
|
Addback:
|
|
|
|
|
|
|
Interest
|
138
|
134
|
4
|
217
|
280
|
(63)
|
Taxes
|
281
|
359
|
(78)
|
181
|
177
|
4
|
Depreciation
and amortization
|
790
|
980
|
(190)
|
1,675
|
1,987
|
(312)
|
Share based
payments
|
82
|
458
|
(376)
|
462
|
399
|
63
|
Gain on
disposal of assets
|
(136)
|
—
|
(136)
|
(136)
|
—
|
(136)
|
Adjusted
EBITDA(1)
|
$
|
1,941
|
$
|
2,501
|
(560)
|
$
|
2,730
|
$
|
2,521
|
209
|
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 information are not facts, but only predictions and
generally can be identified by the use of statements that include
words or phrases such as, "anticipate", "believe", "continue",
"could", "estimate", "expect", "intend", "likely" "may", "project",
"predict", "propose", "potential", "might", "plan", "seek",
"should", "targeting", "will", 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
should not be unduly relied upon by readers, 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:
- Big Rock's business plans, outlook and strategy;
- the Corporation's expectations regarding the COVID-19 pandemic
and the duration of the impacts thereof and challenges and
opportunities presented thereby;
- Big Rock's expectations regarding increased sales of kegs
versus retail packaging;
- anticipated growth in the Corporation's distribution and sales
agency agreements and Big Rock's ability to broaden its revenue
streams;
- the Corporation's 2021 capital plan, including the results and
focus thereof;
- the growth of the Corporation's co-packaging business and the
anticipated timing of the delivery and commissioning of its new
packaging equipment; and
- the ability of Big Rock's capital upgrades and recently
expanded IT budget to enable the business to maximize returns with
growth.
Certain of the above listed forward-looking statements
constitute future-oriented financial
information and financial
outlook information
(collectively, "FOFI")
about Big Rock's prospective
financial position, including, but not limited to:
- anticipated growth in the Corporation's distribution and sales
agency agreements and Big Rock's ability to broaden its revenue
streams; and
- the ability of Big Rock's capital upgrades and recently
expanded IT budget to enable the business to maximize returns with
growth.
FOFI contained in this news release were made as of the date
hereof and is provided for the
purpose of describing Big Rock's
anticipated future business operations.
With respect to the forward-looking statements and FOFI listed
above and contained in this news release, management has made
assumptions regarding, among other things:
- volumes in the current fiscal year will remain constant or will
increase;
- input costs for brewing and packaging materials will not
materially increase or decrease;
- there will be no material change to the regulatory environment
in which Big Rock operates;
- there will be no material supply issues with Big Rock's
vendors; and
- that the duration and extent of the COVID-19 pandemic will not
be long-term.
Some of the risks which could affect future results and could
cause results to differ materially from those expressed in the
forward-looking statements and FOFI contained herein include the
risk factors set out in the Corporation's annual information form
and also include, but are not limited to:
- delays in implementation of the 2021 capital program and
failure to realize the benefits of the same;
- the inability to grow demand for Big Rock's products;
- the worldwide economic and social impact of the COVID-19
pandemic; and
- the duration and extent of the COVID-19 pandemic.
Readers are cautioned that the foregoing list of assumptions and
risk factors is not exhaustive. The forward-looking statements and
FOFI 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 statements or FOFI to reflect new
information, subsequent events or otherwise unless so required by
applicable securities laws.
About Big Rock Brewery Inc.
In 1985, Ed McNally founded Big
Rock to contest the time's beer trends. Three bold,
European-inspired offerings – Bitter, Porter and Traditional Ale –
forged an industry at a time heavy on easy drinking lagers and
light on flavour. Today, our extensive portfolio of signature
beers, ongoing seasonal offerings, six ciders (Rock Creek Cider®
series), custom-crafted private label products and other notable,
licensed alcoholic beverages keeps us at the forefront of the craft
beer revolution and still proudly contesting the beer and alcoholic
beverage trends of today. Big Rock has brewing operations in
Calgary, Alberta, Vancouver, British Columbia, and Toronto, Ontario. Big Rock trades on the TSX
under the symbol "BR". For more information on Big Rock visit
www.bigrockbeer.com
SOURCE Big Rock Brewery Inc.