For Immediate Release
August 6, 2015 Calgary, Alberta—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, 2015.
The Corporation reported an increase in sales volumes of 7% to 50,051 hectolitres (“hl”) for the second quarter of 2015 as compared to 46,597 hl for the same period in 2014. The reported operating loss was $324 thousand for the three months ended June 30, 2015, compared to an operating profit of $342 thousand for the same period in 2014, while net loss was $473 thousand for the second quarter of 2015 as compared to a net income of $276 thousand for the second quarter in 2014.
Big Rock grew volumes and gross profit in Alberta, while at the same time keeping selling expenses below the same periods in 2014. Several new products were successfully launched in the three and six months ended June 30, including a number of new private label beers which more closely align with the tastes of contemporary drinkers together with the rebranding and relaunch of AGD, Big Rock’s most approachable lager, with a unique, limited-time “pop-top” lid.
Margins in Alberta remain under sustained pressure. A recent 27.5% increase in Alberta Gaming and Liquor Commission (“AGLC”) markup rates increased beer costs to consumers and hampered Big Rock’s ability to implement a planned price increase to cover rising input costs. The Corporation has not introduced a general price increase in Alberta since November 2012.
Stronger sales volumes for the quarter were negatively impacted by results in British Columbia (“BC”) where margins relating to products distributed from Calgary were eroded by a shift in product mix towards lower priced beer. Additionally, BC faced increased selling and marketing costs due to the opening of Big Rock Urban in April 2015. Although the launch of Big Rock Urban has been well-received, the brewery is still developing its beer portfolio and so is not yet selling at full capacity and therefore has a higher per-unit cost of sales.
Big Rock’s Ontario expansions continue to progress through the initial planning and pre-permitting stages.
Financial and Operating Highlights
Volume growth occurred in Big Rock’s two largest markets, Alberta and BC, with the launch, or relaunch, of several new products, including the rebranded AGD, Rhine Stone Cowboy, Heffehopper, Wai-iti Wheat Ale and new private label products. Additionally, certain private label products continued to see strong growth following comprehensive rebranding in 2014;
In addition to the new products launched in the quarter, Big Rock expects to release 6 limited edition Calgary-brewed products during the remainder of 2015;
Big Rock also expects to launch from its new Vancouver brewery several permanent and a variety of seasonal beers brewed specifically for the BC market during the rest of 2015.
The Financial Statements and Management’s Discussion and Analysis dated August 6, 2015 can be viewed on Big Rock’s website at http://bigrockbeer.com/sites/default/files/2015q2.pdf and on SEDAR at sedar.com under Big Rock Brewery Inc.
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 future; and the timing of new products and initiatives and the extent to which they will provide incremental sales volumes and improve profitability.
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 facilities in Toronto 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 twelve permanent ales and lagers, the Rock Creek Cider® series of craft ciders, an ongoing selection of seasonal beers released through the Brewmaster’s Limited Edition and cutting-edge, small-batch brews released through the Alchemist Edition.
For more information on Big Rock Brewery visit bigrockbeer.com
For further information, please contact:
Robert Sartor, President and Chief Executive Officer, or Barbara Feit, Chief Financial Officer:
Phone: (403) 720 3239
Fax: (403) 720 3641