Subject: ERN
Waterloo Brewing achieves Record Full-year EBITDA ex one-time costs of $12.0M, up 19% from the Prior Year
Fourth Quarter Highlights:
- Net Revenue for the quarter grew 18.7% to $14.7 million compared to $12.3 million in the prior year.
- Gross Profit Margin for the quarter declined modestly by 2.7% to 29.1% from 31.8% in the prior year - excluding one-time costs.
- Selling, Marketing, and Administration for the quarter increased slightly to $2.6 million, compared to $2.3 million in the prior year
- EBITDA* for the quarter was $3.4 million, a gain of 19%, compared to $2.8 million in the prior year.
- The Board of Directors re-affirmed the quarterly dividend, at $0.02625/share, payable May 29, 2020, to shareholders of record as of May 15, 2020. The dividend is classified as an eligible dividend.
Full Year Highlights:
- Net Revenue increased 12.1% to $60.3 million, from $53.8 million in the prior year - excluding a one-time charge due to The Beer Store's consignment-based change resulting in gross profit decrease of $2.2 million.
- Gross Profit Margin improved to deliver 29.6% compared to 29.1% in the prior year, excluding one-time costs.
- Selling, Marketing, and Administration expenses increased to $11.8 million from $9.5 million in the prior year.
- Reported EBITDA* for the year was $11.6 million ($12.0 million excluding one-time costs, primarily associated with the warehouse expansion). The $12.0 million represents a 19% increase versus prior year $10.1 million.
KITCHENER, ON, April 9, 2020 /CNW/ - Waterloo Brewing Ltd. ("Waterloo Brewing" or the "Company") (TSX: WBR), Ontario's largest Canadian-owned brewery, today released results for the fourth quarter and full-year ended January 31, 2020. Waterloo Brewing posted record annual EBITDA of $12 million on net revenue of $60.3 million. EBITDA for the fourth quarter was up 18.7% from prior year, to $3.4 million.
"Our business has significant momentum and we thank our valued consumers for their continued support," said George Croft, President, and Chief Executive Officer Waterloo Brewing, "From our owner brands to our co-pack business we are extremely pleased with our industry-leading performance and growth in fiscal 2020. In this past fiscal year, we produced a step-change in both the operating and market performance of the business. In each of the past four quarters, we have been able to deliver growth in both volume and margin which resulted in an outstanding +19% EBITDA growth versus the prior year. As a growing company, in a mature category, that performance is simply remarkable and a testament to the drive and passion of everyone who works here at Waterloo Brewing."
"Our premium portfolio posted volume gains of +24% in fiscal 2020. Landshark Lager was a tremendous success story driven by the in-case promotions delivering volume in excess of 30,000 hectolitres and growth of +33%. Our new small-batch brewhouse and taproom will showcase uniquely original Waterloo craft beers and become an innovation engine for our Waterloo brand and further its current +6% momentum. Our flagship Laker brand delivered an astonishing +20% growth versus 2019 thanks to a growing, loyal following of beer drinkers and our Seagram business grew +58% with the launch of our new Island Time Anytime ready-to-drink cocktail. Co-pack production reported a +4.8% revenue growth in fiscal 2020. Continued investment in our operational capabilities also brought in new co-pack agreements in 2019 which will deliver an additional $40 million dollars of revenue over the next three years.", added Croft.
"Our company continues to deliver growth," continued Croft. "It's the product of incredibly hard work by the most dedicated group of people I've had the pleasure of working with in my considerable career. The strategic choices we made several years ago are paying significant dividends today, and we have never been more confident in our ability to deliver value and growth to our shareholders."
The following financial information should be read in conjunction with the audited annual financial statements of the Company prepared under IFRS for the year ended January 31, 2020.
Reconciliation of Net Earnings to Earnings Before Interest Taxes Depreciation and Amortization, and Share Based Payments (EBITDA)*
Fiscal year-to-date ended | ||||
(in thousands of dollars) | January 31, 20201 | January 31, 20192 | ||
Net income | $ | 497 | $ | 1,289 |
Add (deduct): | ||||
Income tax provision | 538 | 545 | ||
Depreciation and amortization | 6,334 | 4,361 | ||
Gain (loss) on disposal of property, plant & equipment and | ||||
right-of-use assets | (15) | 387 | ||
Share-based payments | 892 | 469 | ||
Finance costs | 1,501 | 507 | ||
Loss of misappropriated funds | 1,870 | - | ||
Subtotal | 11,120 | 6,269 | ||
EBITDA * | 11,618 | 7,558 | ||
1. | As a result of the adoption of IFRS 16 effective February 1, 2019, for fiscal 2020, EBITDA* increased by approximately $1.2 million, depreciation and amortization increased by $0.8, and finance costs increased by $0.6 million. |
2. | As a result of a non-recurring adjustment during the quarter ended April 29, 2018, associated with TBS' change to a consignment basis, net income decreased by $1.6 million and EBITDA* decreased by $2.2 million. |
STATEMENTS OF COMPREHENSIVE INCOME
Fiscal years ended January 31, 2020 and January 31, 2019
January 31, 2020 | January 31, 2019 | |||
Revenue | $ | 60,333,417 | $ | 50,084,490 |
Cost of sales | 42,483,862 | 37,108,956 | ||
Gross profit | 17,849,555 | 12,975,534 | ||
Selling, marketing and administration expenses | 11,842,088 | 9,462,821 | ||
Other expenses | 1,616,977 | 784,697 | ||
Finance costs | 1,500,682 | 506,595 | ||
Loss on misappropriated funds, net | 1,869,595 | - | ||
Loss (gain) on disposal of property, plant and | ||||
equipment and right-of-use assets | (15,168) | 387,294 | ||
Income before tax | 1,035,381 | 1,834,127 | ||
Income tax expense | 537,779 | 545,112 | ||
Net income and comprehensive income | ||||
for the year | $ | 497,602 | $ | 1,289,015 |
Basic earnings per share | $ | 0.01 | $ | 0.04 |
Diluted earnings per share | $ | 0.01 | $ | 0.04 |
STATEMENTS OF FINANCIAL POSITION
Fiscal years ended January 31, 2020 and January 31, 2019
January 31, 2020 | January 31, 2019 | |||
ASSETS | ||||
Current assets | ||||
Accounts receivable | 4,976,226 | 4,851,774 | ||
Inventories | 10,482,912 | 10,316,767 | ||
Prepaid expenses | 787,448 | 562,756 | ||
16,246,586 | 15,731,297 | |||
Non-current assets | ||||
Property, plant and equipment | 32,808,678 | 24,645,925 | ||
Right-of-use assets (2019 - Assets held under finance leases) | 27,840,996 | 4,747,572 | ||
Intangible assets | 15,184,333 | 15,253,736 | ||
Construction deposits | 1,050,425 | 1,386,464 | ||
76,884,432 | 46,033,697 | |||
TOTAL ASSETS | 93,131,018 | 61,764,994 | ||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Bank indebtedness | 783,077 | 1,887,253 | ||
Accounts payable and accrued liabilities | 12,909,771 | 7,303,233 | ||
Current portion of lease liabilities (2019 - Current portion of | 2,869,733 | 799,736 | ||
Current portion of long-term debt | 2,946,038 | 1,859,922 | ||
19,508,619 | 11,850,144 | |||
Non-current liabilities | ||||
Provisions | 958,025 | 553,535 | ||
Lease liabilities (2019 - Obligation under finance lease) | 23,226,137 | 2,212,157 | ||
Long-term debt | 13,342,788 | 8,420,927 | ||
Deferred income tax liability | 2,208,947 | 1,671,576 | ||
39,735,897 | 12,858,195 | |||
TOTAL LIABILITIES | 59,244,516 | 24,708,339 | ||
Equity | ||||
Share capital | 39,126,283 | 40,001,097 | ||
Share-based payments reserves | 2,108,671 | 1,325,150 | ||
Deficit | (7,348,452) | (4,269,592) | ||
TOTAL EQUITY | 33,886,502 | 37,056,655 | ||
COMMITMENTS | ||||
TOTAL LIABILITIES AND EQUITY | $ | 93,131,018 | $ | 61,764,994 |
STATEMENTS OF CASH FLOWS
Fiscal years ended January 31, 2020 and January 31, 2019
January 31, 2020 | January 31, 2019 | |||
Operating activities | ||||
Net income | $ | 497,602 | $ | 1,289,015 |
Adjustments for: | ||||
Income tax expense | 537,779 | 545,112 | ||
Finance costs | 1,500,682 | 506,595 | ||
Depreciation and amortization of property, plant and | 6,334,179 | 4,360,675 | ||
Loss (gain) on disposal of property, plant and equipment and | (15,168) | 387,293 | ||
Share-based payments | 892,360 | 469,506 | ||
Change in non-cash working capital related to operations | 5,036,143 | 612,986 | ||
Less: | ||||
Interest paid | (1,373,019) | (533,553) | ||
Cash provided by operating activities | 13,410,558 | 7,637,629 | ||
Investing activities | ||||
Purchase of property, plant and equipment | (11,013,763) | (6,931,468) | ||
Construction deposit paid | (1,050,425) | (1,386,464) | ||
Proceeds from sale of property, plant and equipment, net | 18,656 | 430,000 | ||
Purchase of intangible assets | (134,624) | (69,412) | ||
Cash used in investing activities | (12,180,156) | (7,957,344) | ||
Financing activities | ||||
Increase (decrease) in bank indebtedness | (1,104,176) | 1,099,410 | ||
Issuance of long-term debt, net of fees | 7,961,780 | 4,476,518 | ||
Repayment of long-term debt | (1,964,832) | (1,557,939) | ||
Repayment of obligation under finance lease | (1,563,059) | (769,962) | ||
Dividends paid | (3,576,462) | (3,010,861) | ||
Issuance of shares, net of fees | 96,722 | 53,126 | ||
Shares repurchased and cancelled, including fees | (1,125,484) | (146,310) | ||
Stock option costs | (17,169) | (18,510) | ||
Proceeds from stock option exercise | 62,278 | 194,243 | ||
Cash generated from (used in) financing activities | (1,230,402) | 319,715 | ||
Net increase/(decrease) in cash | - | - | ||
Cash, beginning of year | - | - | ||
Cash, end of year | $ | - | $ | - |
About Waterloo Brewing
Waterloo Brewing is Ontario's largest Canadian-owned brewery. The Company is a regional brewer of award-winning premium quality and value beers and is officially certified under the Global Food Safety Standard, one of the highest and most internationally recognized standards for safe food production. Founded in 1984, Waterloo Brewing Ltd. (formerly Brick Brewing Co. Limited) was the first craft brewery to start up in Ontario and is credited with pioneering the present-day craft brewing renaissance in Canada. Waterloo Brewing has complemented its Waterloo premium craft beers with the popular Laker brand. In 2011, Waterloo Brewing purchased the Canadian rights to Seagram Coolers and in 2015, secured the exclusive Canadian rights to both LandShark and Margaritaville. In addition, Waterloo Brewing utilizes its leading-edge brewing, blending and packaging capabilities to provide an extensive array of contract manufacturing services in beer, coolers, and ciders. Waterloo Brewing trades on the TSX under the symbol WBR. Visit us at www.WaterlooBrewing.com.
Forward-Looking Statements
All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements as of the date of this press release. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "seek", "plan", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, undue reliance should not be placed on these forward-looking statements, which are not guarantees and are subject to certain risks, uncertainties, and assumptions, which may cause actual performance and financial results to differ materially from such forward-looking statements. The forward-looking statements included in this press release are made only at the date of this press release and, except as required by applicable securities laws, the Company does not undertake to publicly update such forward-looking statements to reflect new information, future events or otherwise.
* EBITDA is a non-IFRS earnings measure, therefore it does not have any standardized meaning prescribed by International Financial Reporting Standards and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, depreciation, and amortization, loss on misappropriated funds, gain or loss on disposal of property, plant, and equipment and right-of-use assets, and share-based payments. Management uses this measurement to evaluate the operating results of the Company. This measure is also important to management since it is used by the Company's lenders to evaluate the ongoing cash-generating capability of the Company and therefore the amounts those lenders are willing to lend to the Company. Investors find EBITDA to be useful information because it provides a measure of the Company's operating performance.
SOURCE Waterloo Brewing Ltd.
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