Leading Brands, Inc. Announces Q3 Results; Company Reports Comparable YTD US Dollar Revenue Growth of 19% Net Loss Before Taxes Improves Over Prior Year.Business Editors VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia--(BUSINESS WIRE)--Jan. 20, 2004 Leading Brands, Inc. (Nasdaq:LBIX), North America's only fully integrated premium beverage company, announces results for its 2003 fiscal third quarter ended November November: see month. 30, 2003. Revenue for the quarter was $9,370,000US ($12,490,000Cdn) compared to $10,791,000US ($16,996,000Cdn) in the same quarter of the prior year. Net Loss before taxes was $597,000US ($795,000Cdn) or $0.04US ($0.05Cdn) per share, compared to a net loss before taxes of $722,000US ($1,138,000Cdn) in Q3 of last year. The quarterly net loss was directly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the Company's US subsidiary and the reorganization of that operation during the Fall where certain severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when expenses and continuances were incurred. The Company's Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. operations broke even for the quarter, which is comparable to its best third quarter ever. Year to date revenues were $34,137,000US ($47,354,000Cdn), compared to $37,782,000US ($59,068,000Cdn) last year. Net loss for the first three quarters of the year was $262,000US ($336,000Cdn) versus net income of $1,038,000US ($1,614,000Cdn) after the third quarter of 2002. Leading Brands Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Ralph D. McRae Mc·Rae , Carmen 1920-1994. American jazz singer, songwriter, and pianist who rose to fame in Harlem during the 1940s. Her low-key performing style is distinguished by its wit and rigor. said: "As we previously announced, commencing this fiscal year, our largest co-pack customer changed the way in which we bill them from a full case cost to co-pack fee basis. That simple adjustment reduced our revenues by more than $4,100,000US ($5,500,000Cdn) in Q3 alone and $11,000,000US ($15,100,000Cdn) over the first three quarters of the year, but did not impact net income. If the status quo [Latin, The existing state of things at any given date.] Status quo ante bellum means the state of things before the war. The status quo to be preserved by a preliminary injunction is the last actual, peaceable, uncontested status which preceded the pending controversy. had been maintained, we would have reported record YTD See Year-to-date. YTD See year to date (YTD). revenues of approximately $45,000,000US ($62,000,000Cdn), a US dollar denominated increase over the same period last year of 19%. While such a large percentage of our volume is concentrated in our bottling operations, we will from time to time experience revenue fluctuations of this nature. Again, they do not impact our profitability, just our stated revenue." Mr. McRae added: "During the quarter we set about the task of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). our US operations. Recent losses there were completely unnecessary and we have initiated the personnel changes we believe will right that course. Our efforts to fix that division are now virtually complete. Our US management needs simply to concentrate on generating profitable sales in that market. We are also analyzing the relevance of certain licensed brands to our company and are taking steps to rationalize ra·tion·al·ize v. 1. To make rational. 2. To devise self-satisfying but false or inconsistent reasons for one's behavior, especially as an unconscious defense mechanism through which irrational acts or feelings are made to appear our US product mix. We are strongly committed to developing our own brands and are particularly optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op concerning the initial excitement we have witnessed in regards the launch of our new Soy2O(TM) brand. We are presently rolling out the new TREK TREK Traffic Engineering Toolkit (Everest) (R) Nitro flavor and are allocating resources to profitably building a strong brand identity in specific key markets. "After a year of intense effort, our plants are back running as efficiently as they did before the changes of 2002-03. We are looking forward to reaping the benefits of those changes through the coming year." Mr. McRae concluded: "Over the past three years we had invested more than $5,000,000Cdn in our plant and equipment to increase processing speeds See MHz. and efficiencies. Most of that investment came from our working capital. At the end of December December: see month. we restructured our loan facilities with our principal banker to re-advance more than $2,000,000 Cdn on our long term loans, which in turn dramatically improved our current ratio going into Q4. As an interesting side-note, Stagnito's 2003 Food & Beverage Report ranked Leading Brands as the World's 75th largest beverage company with business in the US. That is no small achievement in less than 10 years of operations." In conjunction with this release, you are invited to listen to the Company's conference call, which will be held on Tuesday Tuesday: see week. , January January: see month. 20, 2004, at 8:00 am, Pacific Time, (11:00 am Eastern Time), with Ralph McRae, Chairman and CEO of Leading Brands, Inc. TO PARTICIPATE IN THE CONFERENCE CALL PLEASE DIAL-IN: 1-416-641-6654 The Company will continue to provide updates in its newsletter on the first of most months, posted at www.LBIX.com. About Leading Brands, Inc. Leading Brands, Inc. (Nasdaq:LBIX) is North America's only fully integrated premium beverage company in 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 . The Company's unique Integrated Distribution System (IDS) (TM) offers turnkey See turnkey system. , one-stop one-stop adj. Relating to or providing a comprehensive selection of goods or services at a single location: one-stop shopping; a one-stop health-care center. shopping to food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. brand owners, including manufacturing, distribution, sales/marketing and licensing. In addition, Leading Brands produces their own line of beverages such as Soy2O(TM), TREK(R), Pez PEZ Penza (Russia) PEZ Pfefferminz (German: peppermint ) PEZ Patriot Engagement Zone (R) 100% Juices(TM), Country Harvest(R) Juices, Caesar's(R) Bloody Caesar Bloody Caesar Noun a drink consisting of vodka, juice made from clams and tomatoes, Worcester sauce and Tabasco Cocktails, and Cool Canadian(R) Water. Statements in this news release that are not historical are to be regarded as forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties with respect to the Company's business include general economic conditions, weather conditions, changing beverage consumption trends, pricing, and the availability of raw materials and economic uncertainties, including currency. We Build Brands(TM) (C)2004 Leading Brands, Inc. This news release is available at www.LBIX.com.
LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS)
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)
Three months Three months Nine months Nine months
ending ending ending ending
November 30, November 30, November 30, November 30,
2003 2002 2003 2002
--------------------------------------------------------------------
Sales $ 12,490,163 $ 16,995,918 $ 47,354,806 $ 59,068,751
Expenses
(Income)
Cost of sales 9,726,051 14,295,784 36,012,902 46,645,376
Operations,
selling,
general &
administration
expenses 3,039,739 3,255,199 11,058,965 10,630,537
Depreciation
and
amortization 398,152 419,152 1,203,917 1,149,897
Interest
expense 109,987 164,900 350,086 519,382
Other 11,568 (1,111) 11,568 (9,188)
------------------------------------------------------
13,285,497 18,133,924 48,637,438 58,936,004
------------------------------------------------------
Net income
(loss) before
taxes (795,334) (1,138,006) (1,282,632) 132,747
Current
income taxes (40,269) - (455,239) -
Future income
taxes 76,024 470,000 1,402,024 1,481,000
------------------------------------------------------
Net income
(loss) after
income taxes (759,579) (668,006) (335,847) 1,613,747
------------------------------------------------------
Deficit,
beginning of
period (22,789,132) (11,177,115) (23,212,864) (13,438,168)
Preferred
Share
Dividends - 10,350 - 31,050
------------------------------------------------------
Deficit, end
of period (23,548,711) (11,855,471) (23,548,711) (11,855,471)
------------------------------------------------------
Earnings
(Loss) Per
Share
Basic $ (0.05) $ (0.05) $ (0.02) $ 0.12
Fully
diluted $ (0.05) $ (0.05) $ (0.02) $ 0.09
Weighted
average
number of
shares
outstanding 15,037,971 13,635,015 14,919,597 13,590,442
--------------------------------------------------------------------
LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS)
(UNAUDITED)
(EXPRESSED IN UNITED STATES DOLLARS)
Three months Three months Nine months Nine months
ending ending ending ending
November 30, November 30, November 30, November 30,
2003 2002 2003 2002
--------------------------------------------------------------------
Sales $ 9,369,965 $ 10,791,059 $ 34,137,067 $ 37,782,472
Expenses
(Income)
Cost of sales 7,296,362 9,076,688 25,969,953 29,829,873
Operations,
selling,
general &
administration
expenses 2,280,375 2,066,793 7,985,255 6,799,044
Depreciation
and
amortization 298,689 266,128 870,908 734,603
Interest
expense 82,511 104,699 253,295 331,967
Other 8,678 (706) 8,678 (5,840)
------------------------------------------------------
9,966,615 11,513,602 35,088,089 37,689,647
------------------------------------------------------
Net income
(loss) before
taxes (596,650) (722,543) (951,022) 92,825
Current
income taxes (30,209) - (331,721) -
Future income
taxes 57,032 298,412 1,020,485 945,579
------------------------------------------------------
Net income
(loss) after
income taxes (569,827) (424,131) (262,258) 1,038,404
------------------------------------------------------
Deficit,
beginning of
period (15,368,992) (7,955,095) (15,676,561) (9,404,297)
Preferred
Share
Dividends - 6,571 - 19,904
------------------------------------------------------
Deficit, end
of period (15,938,819) (8,385,797) (15,938,819) (8,385,797)
------------------------------------------------------
Earnings
(Loss) Per
Share
Basic $ (0.04) $ (0.03) $ (0.02) $ 0.08
Fully
diluted $ (0.04) $ (0.03) $ (0.02) $ 0.06
Weighted
average
number of
shares
outstanding 15,037,971 13,635,015 14,919,597 13,590,442
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