Brick Brewing Reports Record Full-year EBITDA of $8.8M

KITCHENER, ON--(Marketwired - April 13, 2017) -

Fourth Quarter Highlights:

• Net Revenue for the quarter increased to $10.5 million compared to $9.0 million in the fourth quarter of fiscal 2016.

• Gross profit margin for the quarter was 32.2%, an increase from 31.1% in prior year.

• Selling, Marketing and Administration ("SM&A") of $2.3 million, compared to prior year at $1.7 million.

• EBITDA* for the quarter was $1.8 million, compared to EBITDA* in the fourth quarter of fiscal 2016 of $1.6 million.

• The Board of Directors re-affirmed the quarterly dividend, at $0.016/share, payable May 23, 2017 to shareholders of record as of May 9, 2017. The dividend is classified as an eligible dividend.

Full Year Highlights:

• Net revenue increased to $45.2 million, from $37.6 million in the prior year.

• Gross margin improved to 34.8% from 28.0% prior year.

• Selling, Marketing and Administration ("SM&A") expenses increased to $9.2 million from $7.4 million, driven by increased investment in core brands.

• EBITDA* improved to $8.8 million for the full year, up from $5.6 million in the prior year ($6.0 million excluding one-time costs).

Brick Brewing Co. Limited ("Brick" or the "Company") (BRB.TO), Ontario's largest Canadian-owned brewery, today released results for the fourth quarter and full year ended January 31, 2017. Brick posted record annual EBITDA of $8.8 million on net revenue of $45.2 million. EBITDA for the fourth quarter was $1.8 million.

"This past year was clearly an inflection point for Brick Brewing," noted George Croft, President and Chief Executive Officer. "The step up in performance we've been able to deliver for our shareholders has been significant. We have been able to drive double digit growth in volume, expand margins, while increasing our investment in both our brands and our facility. To be able to achieve these goals and still report step change growth in EBITDA is a testament to the quality of the team here at Brick Brewing."

Waterloo premium craft volume increased 15% in fiscal 2017, while Laker also posted gains of 15%. The initial year for LandShark Lager was a tremendous success, achieving volume in excess of 15,000 hectoliters. In addition, Brick reported 20% growth in contract manufacturing revenue for the year, the result of growth with both current and new customers.

Croft added, "While we're enormously pleased with the year we've just reported, there is now the same degree of urgency and commitment to continue to deliver in the year ahead. We have set out a plan that we fully expect will allow us to achieve another year of double-digit growth. Our Kitchener expansion project is well underway, and on track for completion this summer with expected full year recurring savings of $0.6 million. We have introduced a number of new products and packages, including Waterloo Citrus Radler and Margaritaville Classic Margarita, products that we are confident will resonate with our consumers. We are also excited about the upcoming packaging redesign on the core Waterloo brand, and believe it will be a key element in realizing our growth targets in the year ahead. All of these contribute to our confidence in our ability to deliver value and growth to our shareholders for the long term."

The following financial information should be read in conjunction with the audited annual financial statements of the Company prepared under IFRS for the year ended January 31, 2017.

Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization, and Share Based Payments (EBITDA)*
			Fiscal year ended
(in thousands of dollars)			January 31, 2017			January 31, 2016
Net income			$	3,997		$	1,594
Add (deduct):
	Income tax expense			1,345			658
	Depreciation and amortization			2,876			2,983
	Gain on disposal of property, plant and equipment			-			(206)
	Share-based payments			147			125
	Finance costs			478			479
Subtotal				4,846			4,039
EBITDA*				8,843			5,633

STATEMENTS OF COMPREHENSIVE INCOME
Years ended January 31, 2017 and 2016
		January 31, 2017			January 31, 2016
Revenue		$	45,176,380		$	37,609,568
Cost of sales			29,464,917			27,075,078
Gross profit			15,711,463			10,534,490
Selling, marketing and administration expenses			9,248,039			7,367,411
Other expenses			643,273			641,474
Finance costs			478,181			478,945
Gain on disposal of property, plant and equipment			-			(205,912)
Income before tax			5,341,970			2,252,572
Income tax expense			1,345,158			658,392
Net income and comprehensive income for the year		$	3,996,812		$	1,594,180
Basic earnings per share		$	0.11		$	0.05
Diluted earnings per share		$	0.11		$	0.05

STATEMENTS OF FINANCIAL POSITION
As at January 31, 2017 and 2016
				January 31, 2017			January 31, 2016
ASSETS
	Non-current assets
		Property, plant and equipment		$	21,709,425		$	21,986,070
		Intangible assets			15,499,186			15,375,392
		Construction deposits			2,462,328			-
		Deferred income tax assets			-			1,262,769
					39,670,939			38,624,231
	Current assets
		Cash			2,831,959			393,645
		Accounts receivable			7,035,714			6,176,421
		Inventories			5,619,329			3,291,529
		Prepaid expenses			593,180			354,650
					16,080,182			10,216,245
TOTAL ASSETS				$	55,751,121		$	48,840,476
LIABILITIES AND EQUITY
	Equity
		Share capital			39,651,096			39,526,573
		Share-based payments reserves			943,565			932,201
		Deficit			(2,758,560)			(4,933,195)
	TOTAL EQUITY				37,836,101			35,525,579
	Non-current liabilities
		Provisions			411,599			388,548
		Obligation under finance lease			3,781,855			4,523,152
		Long-term debt			2,498,580			1,548,584
		Deferred income tax liabilities			82,389			-
					6,774,423			6,460,284
	Current liabilities
		Accounts payable and accrued liabilities			9,655,405			4,908,722
		Current portion of obligation under finance lease			741,297			713,699
		Current portion of long-term debt			743,895			1,232,192
					11,140,597			6,854,613
TOTAL LIABILITIES					17,915,020			13,314,897
COMMITMENTS
TOTAL LIABILITIES AND EQUITY				$	55,751,121		$	48,840,476

STATEMENTS OF CASH FLOWS
Years ended January 31, 2017 and 2016
					January 31, 2017				January 31, 2016
Operating activities
		Net income			$	3,996,812			$	1,594,180
		Adjustments for:
			Income tax expense			1,345,158				658,392
			Finance costs			478,181				478,945
			Depreciation and amortization of property, plant and equipment and intangibles			2,875,958				2,983,271
			Gain on disposal of property, plant and equipment			-				(205,912	)
			Share-based payments			147,292				125,257
			Change in non-cash working capital related to operations			1,320,659				689,069
		Less:
			Interest paid			(395,851	)			(441,196	)
Cash provided by operating activities						9,768,209				5,882,006
Investing activities
		Purchase of property, plant and equipment				(2,578,913	)			(2,806,182	)
		Construction deposit paid				(2,462,328	)			(936,595	)
		Proceeds from sale of property, plant and equipment, net				-				331,490
		Purchase of intangible assets				(144,194	)			(281,545	)
Cash used in investing activities						(5,185,435	)			(3,692,832	)
Financing activities
		Issuance of long-term debt				2,000,000				-
		Repayment of long-term debt				(1,597,179	)			(1,507,957	)
		Repayment of obligation under finance lease				(713,699	)			(306,975	)
		Dividends paid				(1,822,177	)			(419,900	)
		Issuance of shares, net of fees				45,867				21,520
		Shares repurchased and cancelled, including fees				(266,856	)			(384,602	)
		Proceeds from stock option exercise				209,584				207,409
Cash used in financing activities						(2,144,460	)			(2,390,505	)
Net increase/(decrease) in cash						2,438,314				(201,331	)
Cash, beginning of year						393,645				594,976
Cash, end of year					$	2,831,959			$	393,645
Non-cash investing and financing activities:
		Acquisition of assets under finance lease			$	-			$	4,169,156

About Brick Brewing

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. In 2011, Brick purchased the Canadian rights to Seagram Coolers and in 2015, secured the exclusive Canadian rights to both LandShark and Margaritaville. In addition, Brick utilizes its leading edge brewing, blending and packaging capabilities to provide an extensive array of contract manufacturing services in beer, coolers and ciders. Brick trades on the TSX under the symbol BRB. Visit us at www.brickbeer.com.

Forward-Looking Statements

All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements as of the date of this press release. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "seek", "plan", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, undue reliance should not be placed on these forward-looking statements, which are not guarantees and are subject to certain risks, uncertainties and assumptions, which may cause actual performance and financial results to differ materially from such forward-looking statements. The forward-looking statements included in this press release are made only at the date of this press release and, except as required by applicable securities laws, the Corporation does not undertake to publicly update such forward-looking statements to reflect new information, future events or otherwise.

* EBITDA is a non-IFRS earnings measure, therefore it does not have any standardized meaning prescribed by International Financial Reporting Standards and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, depreciation and amortization, gain on disposal of property, plant, and equipment, and share based payments. Management uses this measurement to evaluate the operating results of the Company. This measure is also important to management since it is used by the Company's lenders to evaluate the ongoing cash generating capability of the Company and therefore the amounts those lenders are willing to lend to the Company. Investors find EBITDA to be useful information because it provides a measure of the Company's operating performance.