BIG ROCK BREWERY INC. ANNOUNCES CONTINUED IMPROVEMENT IN FINANCIAL RESULTS: FISCAL 2023

For Immediate Release

March 28, 2024 — Calgary, Alberta — Big Rock Brewery Inc. (TSX: BR) (“Big Rock” or the “Corporation”) today announced its financial results for the three months and year ended December 30, 2023.

Financial Summary

For the three months ended December 30, 2023, compared to the three months ended December 30, 2022, the Corporation reported:

• wholesale sales volumes (beer, ready-to-drink beverages and cider) down 1% to 35,314 hectolitres (“hl”) compared to 35,654 hl;
• net revenue decreased by 15% to $9.0 million from $10.5 million;
• operating loss decreased by 60% to $1.5 million compared to $3.8 million;
• net loss decreased by $2.1 million from $4.2 million; and
• Adjusted EBITDA increased by $2.8 million to $(0.7) million. Adjusted EBITDA is a non-GAAP (as defined below) financial measure, see “Non-GAAP Measures”.

For the year ended December 30, 2023, compared to the year ended December 30, 2022, the Corporation reported:

• wholesale sales volumes (beer, ready-to-drink beverages and cider) down 1% to 157,203 hl from 158,496 hl;
• net revenue down 7% to $43.7 million from $47.1 million;
• operating loss decreased to $1.6 million from $6.9 million;
• net loss decreased to $2.9 million from $7.1 million;
• Adjusted EBITDA increased by $5.6 million to $2.2 million from ( $3.4 ) million; and
• $0.7 million of term debt was repaid and $3.4 million was drawn in the year on the operating facility for total debt of $16.6 million, representing an increase of $2.8 million from the $13.8 million outstanding as at December 30, 2022.

In December of 2023 the Corporation announced that it had concluded its search for a permanent Chief Executive Officer and on January 8, 2024, David Kinder, a veteran of the beverage industry, was appointed President and Chief Executive Officer of the Corporation, replacing Mr. Giblin who had taken on the role on an interim basis.

In January of 2024 the Corporation announced the addition of a $4.2 million tranche to its existing $4.3 million second lien financing (the “Second Lien Financing”) with VN Capital, a principal shareholder of Big Rock. This funding was introduced to provide liquidity, access to funds for capital expenditures and to satisfy the $0.6 million shortfall incurred during Q4 versus the Adjusted EBITDA target provided by the Corporation’s primary lender, ATB Financial (“ATB”). Under the terms of the credit agreement in place with ATB, this injection of funds satisfied the Corporation’s obligations with respect to this deficiency. In January of 2024 the Corporation also announced it had concluded its strategic review process.

“Resulting from considerable effort and commitment from our team at Big Rock, we are proud to announce significant improvements to Big Rock’s performance during the fourth quarter of 2023 versus last year,” noted President and Chief Executive Officer of the Corporation David Kinder. “The $2.8 million improvement in Adjusted EBITDA on a year-over-year basis was supplemented by investments in our innovation, sales and marketing programs. These improved financial results were generated despite reduced co-packing volumes during the quarter. During a year when domestic beer sales in Canada were reported to have declined by more than 2%¹, our efforts at Big Rock allowed us to show a modest increase in beer sales, year-over-year. We are extremely proud of our sales, production, and packaging teams for this achievement. We believe this momentum, combined with continued attention to streamlining production and maximizing our return on sales and marketing initiatives for our branded, white-label and co-packing businesses will help us continue to improve our financial results and strengthen our balance sheet.”

Summary of Results

(1) Excludes contract manufacturing volumes due to the nature of the agreements.
(2) Non-GAAP measure. See “Non-GAAP Measures”.

Additional Information

The audited consolidated financial statements and Management’s Discussion and Analysis for the year ended December 30, 2023 dated March 28, 2024, can be viewed on Big Rock’s website at www.bigrockbeer.com and on SEDAR+ at www.sedarplus.ca under Big Rock Brewery Inc.

Big Rock is also pleased to announce that the Annual Meeting of Big Rock shareholders is expected to be held on May 28, 2024 at 2:00 p.m. (Mountain Standard Time). Further details of the Annual Meeting will follow in due course.

¹ Source: Beer Canada’s Monthly Domestic Beer Sales statistics accumulated from provincial liquor boards, distributors and brewers (https://beercanada.com/sales-statistics/)

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 (“GAAP”). Such financial measures do not have a standardized meaning under GAAP and therefore may not be comparable to similar measures presented by other issuers.

This press release contains the term “Adjusted EBITDA”. Adjusted EBITDA is a non-GAAP financial measure that the Corporation uses to measure operating performance and borrowing capacity. The calculation of Adjusted EBITDA is a non-GAAP financial measure, whose nearest GAAP measure is net income, or net loss, as applicable, with the reconciliation between the two as follows:

(1) Non-GAAP measure. See “Non-GAAP Measures”.

Adjusted EBITDA in the three months ended December 30, 2023 increased by $2.8 million in comparison to the corresponding period in the prior year. The decrease is driven primarily due cost savings initiatives and to the absence of a write-off of inventory in the fourth quarter of 2023 compared to 2022.

Forward-Looking Information

Certain statements contained in this press 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 press 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 press release and are expressly qualified, in their entirety, by this cautionary statement.

In particular, this press release contains forward-looking statements pertaining to the following:
• Big Rock’s long-term growth strategy and the anticipated benefits to be derived therefrom;
• Big Rock’s continued attention to streamlining production and maximizing our return on sales and marketing initiatives for our branded, white-label and co-packing businesses and Big Rock’s belief that such continued attention will help to improve financial results and improve the health of our balance sheet;
• anticipated market trends;
• that Big Rock is positioned for further growth;
• Big Rock’s business plans, outlook, and strategy; and
• the anticipated date and timing of Big Rock’s Annual Meeting of shareholders and Big Rock’s expectation that further details in connection therewith will follow in due course.

With respect to the forward-looking statements listed above and contained in this press release, management has made assumptions regarding, among other things:
• 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;
• seasonal fluctuations in demand; and
• that continued attention to streamlining production and maximizing return on sales and marketing initiatives for Big Rock’s branded, white-label and co-packing businesses will help to improve financial results and improve the health of the Corporation’s balance sheet.

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 the risk factors set out in the Corporation’s annual information form for the year ended December 30, 2023 which is available on SEDAR+ at www.sedarplus.ca and also include, but are not limited to:
• risks related to Big Rock’s credit facility with ATB and the Second Lien Financing;
• the inability to grow demand for Big Rock’s products;
• the risk that Big Rock may not have an increase in market demand or market share;
• the risk that Big Rock may not realize the benefits of increased co-packing production;
• the risk that continued attention to streamlining production and maximizing return on sales and marketing initiatives for Big Rock’s branded, white-label and co-packing businesses, won’t help the Corporation continue to improve its financial results and strengthen its balance sheet;
• the risk that Big Rock may not realize operational efficiencies or margin growth;
• the risk that Big Rock may not have sufficient cash flows to cover forecasted expenses or return to profitability; and
• the risk that Big Rock may not be in compliance with its financial covenants for the next 12 months.

Any financial outlook or future oriented financial information (in each case “FOFI”) contained in this press release regarding prospective financial position, including, but not limited to: expectations regarding continued improvement in Big Rock’s financial results and the anticipated benefits to be derived therefrom and Big Rock’s long-term growth strategy and the anticipated benefits to be derived therefrom are 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 press release and the Corporation 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 press 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, 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

For further information, please contact:
David Kinder, President & Chief Executive Officer, or Michael Holditch, Interim Chief Financial Officer:
Phone: (403) 720-3239
Fax: (403) 720-3641
Email: investors@bigrockbeer.com