Big Rock Brewery Income Trust Announces 3rd Quarter Results.CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. -- Big Rock Brewery The Big Rock BreweryTSX: BR is located in Calgary, Alberta, Canada. The brewery was founded in 1985 by Ed McNally. After forming the Big Rock brewing company he hired Bernd "Peppy" Pieper, considered to be one of the best brewmasters in the world. Income Trust (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :BR.UN) (the "Trust") is pleased to report to Unitholders its unaudited consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: financial results for the three and nine month periods ended September September: see month. 30, 2005. These results reflect the consolidated operations of the Trust, Big Rock Brewery Ltd. and its wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. Kamloops Kamloops (kăm`l  ps), city (1991 pop. 67,057), S British Columbia, Canada, at the junction of the North Thompson and South Thompson rivers. Brewery A brewery can be a building or place that produces beer, or a business (brewing company) whose trade is the production and sale of beer. Breweries can take up multiple city blocks, or be a collection of equipment in a homebrewer's kitchen. Ltd. and Whistler whistler: see marmot. See Windows XP. Brewing brewing: see beer. Company Ltd. Financial Highlights for the three and nine month periods ended September 30, 2005 compared with the same periods for 2004 are as follows: Net income for the quarter ending September 30, 2005 increased by 19% to $2,224,067 compared to $1,861,971 for the three months ended September 30, 2004. This $362,096 increase is largely due to increased sales volume. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. net income is down by $578,238 (11%) from $5,499,224 last year to $4,921,986 this year due to the growth of lower margin value brands and a non-cash stock based compensation charge of $258,660 booked in the second quarter. Net income per unit increased to $0.37 for the three months ended September 30, 2005 from $0.32 for the three months ended September 30, 2004. Year-to-date net income per unit decreased to $0.83 for the nine months ended September 30, 2005 from $0.95 for the nine months ended September 30, 2004. Cash distributions to unitholders for the three months ended September 30, 2005 were $1,963,447 or $0.33 per unit. This represents 62% of cash generated from operating activities. During the same quarter last year the Trust declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. total cash distributions of $0.25 per trust unit amounting to $1,455,367 in total. Year-to-date Big Rock has distributed 87% ($5,611,155) of cash provided by operating activities of $6,414,135. Big Rock's sales force achieved an all-time all-time adj. Exceeding all others up to the present time: an all-time speed skating record. all-time Adjective Informal quarterly sales record as summer product volume increased by 30% to 62,740 HL for the three months ended September 30, 2005 from 48,128 HL for the same period last year. The majority of the volume increase is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to new business in value and private label brands however Big Rock's proprietary premium brand volume was up by 4% quarter over quarter. Year-to-date volumes are up 8% to 160,820 HL from 149,242 HL. For the three months ended September 30, 2005, net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight revenue increased by $1,657,556 from $10,118,479 last year to $11,776,035, a 16% increase. Consistent with trends reported by other brewers This is a list of member brewers of the Brewers Association. Numbered
See product mix. as value brands grew at a faster rate than premium proprietary brands. This has resulted in lower revenue per hectoliter hec·to·li·ter n. Abbr. hl A metric unit of volume equal to 100 liters. Noun 1. hectoliter - a metric unit of volume or capacity equal to 100 liters hectolitre, hl . Year-to-date net sales revenue decreased by $11 per HL from $201 to $190. Big Rock continues to be well positioned to aggressively compete in all market segments as the brewery can add significant capacity at a relatively low cost. Year-to-date net revenue increased to $30,555,869 from $29,890,211 a $575,658 (2%) increase. Commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the large volume increase, cost of sales increased by $974,494 (28%) to $4,428,841 for the three months ended September 30, 2005 from $3,454,347 last year. Year-to-date cost of sales is up by $862,965 (8%) to $11,589,356 for the nine months ended September 30, 2005 from $10,726,391 for the same period last year. Big Rock's sale of canned beer has been increasing as a proportion of packaged beer sales. This is positive as the production costs of canned beer are lower than bottled beer due to Big Rock's highly automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. can line. This has resulted in a relatively consistent cost of sales per hectoliter even though many other input costs have been increasing. Gross profit for the quarter rose 10% to $7,347,194 this quarter from $6,664,132 for the same three months last year. Year-to-date gross profit is down $287,307 (1%) from $19,253,820 last year to $18,966,513 this year. The quarterly increase is largely due to volume increase while the year-to-date decrease is primarily due to the changing sales mix resulting from the growing popularity of lower margin brands. Selling expenses for the three months ended September 30, 2005 increased to $3,416,764 compared to $2,833,481 for the three month period last year, a 20% increase. Year-to-date selling expenses are up $514,935 (6%) from $8,495,242 last year to $9,010,177 this year. Increased expenditures on the summer Grasshopper grasshopper, name applied to almost 9,000 different species of singing, jumping insects in two families of the order Orthoptera. Grasshoppers are long, slender, winged insects with powerful hind legs and strong mandibles, or mouthparts, adapted for chewing. campaign which featured billboards and radio advertising accounted for the majority of this increase. This campaign yielded positive growth for the brand during the quarter. During the quarter ended September 30, 2005, general and administrative expenses decreased to $888,850 from $973,044 for the three months ending September 30, 2004, a $84,194 (9%) decrease. Year-to-date general and administrative expense was down by $132,867 (5%) to $2,789,355 from $2,922,222 for the same period last year. Income tax expense for the quarter of $288,680 (three months ended September 30, 2004 - $503,908) is comprised of $232,248 in current income tax expense and $56,432 in future income tax expense. Year-to-date income tax expense was $690,116 compared to $828,374 for the nine months last year. Big Rock's balance sheet remains strong. The Trust continued to operate using internally generated cash flow during the quarter and has not had to assume any long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Subsequent to quarter-end Big Rock further strengthened its cash position with the monetization Monetization The securitization of the gross revenues of a contract. of the Kamloops brewery assets. As previously announced, on October October: see month. 12, 2005, subsequent to quarter-end, Big Rock sold its Kamloops brewery and related assets to a British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography based arm's length arm's length adj. the description of an agreement made by two parties freely and independently of each other, and without some special relationship, such as being a relative, having another deal on the side or one party having complete control of the other. private investor group for cash proceeds of $4,970,000. The book value of the Kamloops assets sold was $4,547,000. After selling expenses and professional fees totaling $240,000 and income tax arising from the transaction of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $144,000 the sale will not have a material effect on fourth quarter earnings
Selected Financial information follows:
Big Rock Brewery Income Trust
Consolidated Statements of Operations & Undistributed Income
(unaudited)
Three months ended Nine months ended
September 30 September 30
2005 2004 2005 2004
------------------------ -------------------------
Revenue
Net sales $11,776,035 $10,118,479 $30,555,869 $29,980,211
Cost of sales 4,428,841 3,454,347 11,589,356 10,726,391
------------------------ -------------------------
Gross profit 7,347,194 6,664,132 18,966,513 19,253,820
------------------------ -------------------------
Expenses
Selling 3,416,764 2,833,481 9,010,177 8,495,242
General and
administrative 888,850 973,044 2,789,355 2,922,222
Interest - 23,234 1,058 117,555
Amortization 528,833 468,494 1,554,821 1,391,203
------------------------ -------------------------
4,834,447 4,298,253 13,355,411 12,926,222
------------------------ -------------------------
Income before
income taxes 2,512,747 2,365,879 5,611,102 6,327,598
------------------------ -------------------------
Income taxes
Current 232,248 149,569 368,067 204,969
Future 56,432 354,339 322,049 623,405
------------------------ -------------------------
288,680 503,908 690,116 828,374
------------------------ -------------------------
Net income for the
period 2,224,067 1,861,971 4,920,986 5,499,224
Undistributed
income,
beginning of
period 11,687,523 12,669,765 12,705,745 11,610,381
Distributions
declared (1,966,219) (1,455,367) (5,681,360) (4,033,236)
------------------------ -------------------------
Undistributed
income, end of
period $11,945,371 $13,076,369 $11,945,371 $13,076,369
------------------------ -------------------------
------------------------ -------------------------
Net income
per unit
Basic $ 0.37 $ 0.32 $ 0.83 $ 0.95
Diluted $ 0.37 $ 0.31 $ 0.83 $ 0.94
Big Rock Brewery Income Trust
Consolidated Balance Sheets
(unaudited)
30-Sep-05 31-Dec-04
Assets
Current
Cash $ 768,882 $ 2,093,695
Accounts receivable 2,483,304 2,758,246
Inventories 4,877,125 4,667,950
Prepaid expenses and other 389,067 427,169
Investments 27,678 33,008
Brewery assets held for sale (note 4) 3,454,000 -
----------------------------
12,000,056 9,980,068
Property, plant and equipment 28,521,357 29,897,468
Deferred charges and other assets 363,528 323,714
Goodwill - 727,218
----------------------------
$ 40,884,941 $ 40,928,468
----------------------------
----------------------------
Liabilities and Unitholders' Equity
Current
Accounts payable and accrued
liabilities 2,278,656 3,176,104
Income taxes payable 398,008 252,140
Distributions payable 656,147 585,942
----------------------------
3,332,811 4,014,186
Future income taxes 7,716,180 7,394,131
----------------------------
11,048,991 11,408,317
Unitholders' equity
Trust Unitholders' capital
(note 2) 17,594,370 16,754,964
Contributed surplus 296,209 59,442
Undistributed income 11,945,371 12,705,745
----------------------------
29,835,950 29,520,151
----------------------------
$ 40,884,941 $ 40,928,468
----------------------------
----------------------------
Big Rock Brewery Income Trust
Consolidated Statements of Cash Flow
(unaudited)
Three months ended Nine months ended
September 30 September 30
2005 2004 2005 2004
------------------------ -------------------------
Operating Activities
Net income for
the period $2,224,067 $1,861,971 $4,920,986 $5,499,224
Items not
affecting cash:
Amortization 528,833 468,494 1,554,821 1,391,203
Stock based
compensation - - 258,660 35,292
Future income
taxes 56,432 354,339 322,049 623,405
------------------------ -------------------------
2,809,332 2,684,804 7,056,516 7,549,124
Net change in
non-cash working
capital relating
to operating
activities 365,176 2,026,935 (642,381) 1,885,932
------------------------ -------------------------
Cash provided by
operating
activities 3,174,508 4,711,739 6,414,135 9,435,056
------------------------ -------------------------
Financing Activities
Increase (decrease)
in bank
indebtedness (172,348) 260,000 - (1,304,393)
Repayment of
long-term debt - (1,575,000) - (2,301,242)
Distribution
payments (1,963,447) (1,391,750) (5,611,155) (3,830,420)
Cash received on
exercise
of options 186,391 502,375 817,513 1,432,020
------------------------ -------------------------
Cash used in
financing
activities (1,949,404) (2,204,375) (4,793,642) (6,004,035)
------------------------ -------------------------
Investing Activities
Purchase of
plant and
equipment (449,679) (425,621) (2,905,492) (1,247,696)
Deferred charges
and other assets (6,543) 6,784 (39,814) 23,040
------------------------ -------------------------
Cash used in
investing
activities (456,222) (418,837) (2,945,306) (1,224,656)
------------------------ -------------------------
Net increase
(decrease) in cash 768,882 2,088,527 (1,324,813) 2,206,365
Cash, beginning
of period - 375,096 2,093,695 257,258
------------------------ -------------------------
Cash, end
of period $ 768,882 $2,463,623 $ 768,882 $2,463,623
------------------------ -------------------------
------------------------ -------------------------
Big Rock is a regional producer and marketer of premium quality beers, headquartered in Calgary, Alberta, Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Big Rock's products are available in draught, bottles and cans. The Company also produces or distributes cider and cooler products. Big Rock products are marketed in seven provinces and three territories in Canada. Big Rock Brewery Income Trust (TSX:BR.UN) |
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