Yahoo Finance BIG ROCK BREWERY REPORTS STRONG FIRST QUARTER 2023 RESULTS
CALGARY, AB, May 15, 2023 /CNW/ - Big Rock Brewery Inc. (TSX: BR) ("Big Rock" or the "Corporation") today announced its financial results for the three months ended March 31, 2023.
"Our ability to deliver on a strong first quarter in fiscal 2023 has been a great win for the organization," said interim President & CEO Stephen Giblin. "Our people at every level of the organization deserve recognition for the Corporation's strong performance. Management is pleased to see that the changes made across the business are beginning to culminate in returning the Corporation to profitability and the focus remains to continue to build upon this positive momentum as we continue through the remainder of fiscal 2023."
Financial Summary
For the three months ended March 31, 2023, compared to the three months ended March 31, 2022, the Corporation reported:
sales volumes increased by 1.5% from 33,279 hectolitres ("hl") to 33,778 hl;
net revenue increased by 18.9% from $8.8 million to $10.5 million;
operating loss of $0.1 million versus an operating loss of $1.5 million;
net loss of $0.3 million versus a net loss of $1.3 million; and
Adjusted EBITDA increased from a loss of $0.6 million to positive $0.5 million. Adjusted EBITDA is a non-GAAP financial measure, see "Non-GAAP Measures".
Summary of Results
$000, except hl and per share amounts | Three months ended March 31 | |
2023 | 2022 | |
Sales volumes (hl) (1) | 33,778 | 33,279 |
Gross revenue | $ 13,639 | $ 12,712 |
Net revenue | 10,451 | 8,787 |
Cost of sales | 7,488 | 6,073 |
Adjusted EBITDA (2) | 522 | (620) |
Operating income (loss) | (144) | (1,488) |
Net income (loss) | (255) | (1,271) |
Income (loss) per share (basic and diluted) | $ (0.04) | $ (0.18) |
(1) | Excludes contract manufacturing volumes due to the nature of the agreements. |
(2) | Non-GAAP measure. See "Non-GAAP Measures". |
First Quarter Summary
total sales volumes for the first quarter of 2023 increased by 1.5% driven primarily by increases in private label as well as value brands of 25% and 8% respectively, in comparison to the first quarter of 2022;
cost of sales increased slightly as a percentage of revenue, driven by continued trends in increased costs in utilities, building related costs, and some key raw materials, but was slightly offset by a decrease in salaries, wages and benefits;
selling and general & administrative expenses decreased by an aggregate $1.1 million in the first quarter of 2023 compared to 2022, driven primarily by a reduction in salaries, wages and benefits as a result of optimized restructuring efforts dating back to the fourth quarter of 2022;
Additionally, as a direct result of the large inventory write-down in the fourth quarter of 2022, the Corporation has been diligent in focusing on optimizing inventory levels and warehousing. In comparison to the first quarter ended in 2022, inventory levels are nearly 40% lower for the first quarter ended in 2023. Managing appropriate inventory levels as the Corporation heads into peak season will continue to be at the forefront, while simultaneously ensuring that the Corporation's customers are continually provided with fresh, high-quality, on-time products.
Additional Information
The interim condensed consolidated financial statements and Management's Discussion and Analysis for the three months ended March 31, 2023 dated May 15, 2022, can be viewed on Big Rock's website at www.bigrockbeer.com and on SEDAR at www.sedar.com under Big Rock Brewery Inc.
Big Rock is also pleased to announce that the Annual Meeting of Big Rock shareholders will be held on May 25, 2023, at 2:00 p.m. (Mountain Standard Time).
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. Adjusted EBITDA is defined as net loss before interest, taxes, depreciation and amortization and share based payments. Management believes that this measure facilitates the understanding of the Corporation's results from operations. The nearest GAAP measure to Adjusted EBITDA is net income, or net loss as applicable, with the reconciliation between the two as follows:
($000, except where indicated) | Three months ended March 31 | ||
2023 | 2022 | Change | |
Net income (loss) | $ (255) | $ (1,271) | $ 1,016 |
Addback: | |||
Interest | 463 | 158 | 305 |
Taxes | (237) | (372) | 371 |
Depreciation and amortization | 1,163 | 819 | 344 |
Share based payments | (221) | 46 | (267) |
Gain on disposal of assets | (212) | - | (212) |
Rent paid on leased real property | (179) | - | (179) |
Adjusted EBITDA (1) | $ 522 | $ (620) | $ 1,142 |
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;
Big Rock's vision to become Canada's largest independent brewer;
that Big Rock's group purchasing strategies will improve its purchasing power and mitigate cost increases;
that Big Rock's fixed price contracts on raw materials and utilities will mitigate price volatility going forward;
Big Rock's expectations that it will continue to realize overhead and labor cost efficiencies as volume throughput grows with anticipated growth in co-packing volume;
Big Rock's expectations that its operating efficiency will improve as a result of the new capital equipment upgrades at its Calgary facility; and
the anticipated benefits to be derived from Big Rock's expanded production capacity and new production capabilities associated with pasteurization.
With respect to the forward-looking statements listed above and FOFI (as defined below) contained in this news release, management has made assumptions regarding, among other things:
that Big Rock's long-term growth strategy will support it in becoming Canada's largest independent brewer;
that Big Rock's group purchasing strategies will improve its purchasing power;
that Big Rock's new capital equipment upgrades at its Calgary facility will improve its operating efficiency;
that Big Rock's expanded production capacity, combined with new production capabilities associated with pasteurization, will position Big Rock to execute its growth plans with respect to co-packing arrangements;
volumes in the current fiscal year will remain constant or will increase;
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 information and 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:
that Big Rock's group purchasing strategies may not improve its purchasing power and mitigate cost increases;
that Big Rock's fixed price contracts on raw materials and utilities may not mitigate price volatility;
that Big Rock's new capital equipment upgrades at its Calgary facility may not improve its operating efficiency;
that the year-over-year growth in Big Rock's co-packing arrangements may be less than anticipated;
the inability to grow demand for Big Rock's products; and
the duration and extent of the COVID-19 pandemic.
Any financial outlook or future oriented financial information (in each case "FOFI") contained in this news release regarding prospective financial position, including anticipated year over year growth in 2022, is based on reasonable assumptions about future events, including those described above, based on an assessment by management of the relevant information that is currently available. The actual results will likely vary from the amounts set forth herein and such variations may be material. Readers are cautioned that any such FOFI contained herein should not be used for purposes other than those for which it is disclosed herein. Such information was made as of the date of this news release and the Company disclaims any intention or obligation to update or revise any such information, whether as a result of new information, future events, or otherwise, unless required pursuant to applicable law.
Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking information and statements and FOFI contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking information and statements and FOFI 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.
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, 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.
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