Big Rock Brewery Inc Announces Third Quarter Results
November 7, 2024 — Calgary, Alberta — Big Rock Brewery Inc. (TSX: BR) (“Big Rock” or the “Corporation”) today announces its financial results for the three and nine-month periods ended September 30, 2024.
Financial Summary
For the three months ended September 30, 2024, compared to the three months ended September 30, 2023, the Corporation reported:
For the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, the Corporation reported:
David Kinder, Big Rock’s President and Chief Executive Officer noted, “While industry-wide challenges persist, impacting our wholesale volume growth, we’re excited to share some positive momentum at Big Rock Brewery. In Q3 2024, we successfully introduced a new multi-year co-packing arrangement and expanded our co-pack volumes with our partners, contributing to growth in our gross margin over the same period last year. Big Rock continues to grow both capacity and capability within the ready-to-drink (“RTD”) category, prioritizing additional facility investment that supports both ongoing and future demand, allowing us to scale up and to win in this critical space.”
Mr. Kinder commented further, “Despite the headwinds in the beer industry overall, we remain firmly committed to investing in our brands, our people, and our innovation pipeline. By strengthening our team and building on our reputation for quality and creativity, we are positioning Big Rock to respond and to thrive in an evolving market and to meet the changing tastes of our customers with renewed passion and purpose. While these strategic investments increased our operating costs this quarter, negatively impacting our EBITDA and earnings, we believe they are crucial steps toward creating sustainable, long-term growth and value for our stakeholders.”
Summary of Results
In 2023 Big Rock embarked on a strategy of, where possible, balancing production and sales between quarters to allow for a reduction of operating costs. Reduced co-packing contract volumes made this difficult during the last half of 2023 and the first three quarters of 2024. In response to the reduction of contract volumes, management signed a three-year contract with a co-packing partner to produce 50,000 hl or more annually. These volumes are expected to allow for a more balanced schedule and replace the volumes lost during 2023 due to the expiry of a key co-packing contract, providing critical mass in terms of production and contract sales volumes.
Big Rock’s wholesale sales volumes for the third quarter of 2024 were down 6.2% compared to the same period in 2023. While wholesale sales volumes declined, revenues (including beer, cider, non-alcoholic and ready to drink beverages), inclusive of co-packing/contract revenues, increased 10.6% in the third quarter compared to the same period in 2023. This continues to demonstrate the strength of the Corporation’s efforts to align with consumer demand and focus on premium product innovation and development as well as lean into the co-packing segment of our business.
Big Rock’s adjusted EBITDA decreased by $0.7 million to $0.3 million in the third quarter of 2024. Even though the Corporation saw gross margin for the third quarter of 2024 increase to 30.6% compared to 29.9% in the same period in 2023 EBITDA went down as a result of management’s strategic and operational decision to increase selling & marketing costs in 2024 in order to build awareness and engage target audiences which will drive future sales.
Since January of this year, Big Rock has introduced a series of changes designed to strengthen its operations and provide for financial stability:
Additional Information
The unaudited condensed interim consolidated financial statements of the Corporation and the Corporation’s Management Discussion and Analysis for the three and nine months ended September 30, 2024 dated November 7th, 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.
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:
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:
With respect to the forward-looking statements listed above and contained in this press release, management has made assumptions regarding, among other things:
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:
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 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 James Chong, Chief Financial Officer:
Phone: (403) 720-3239
Fax: (403) 720-3641
Email: investors@bigrockbeer.com