E-Malt.com News article: 3595

Canada, Guelph: Sleeman Breweries Ltd. released on November 4, 2004 its financial results for the thirdquarter ended September 25, 2004. Net revenue for the third quarter of 2004 increased to $60.7 million compared with $53.1 million for the same period last year. This 14% year-over-year increase was the result of a 7% increase in produced and sold volumes combined with the inclusion of revenue from the Unibroue acquisition which closed on June 30, 2004. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased over the comparable quarter last year by $1.2 million or 13%. Proforma net income increased 15% determined after adjustments for acquisition of Unibroue, termination of the Quebec private label contract and non-recurring items. Reported net income increased 2% to $4.5 million, compared with $4.4 million in the third quarter of 2003. Proforma diluted earnings per share increased 11% to $0.30 compared to $0.27 in the prior year’s third quarter. Reported earnings per share were $0.27 in the current quarter, consistent with the earnings per share reported in last year’s third quarter.

“Despite the poor summer weather and the significant price competition in the Ontario value brand category, we were able to achieve solid financial results in the quarter through increasing higher margin premium brand volume and cost containment measures,” said John Sleeman, Chairman & CEO.

First Nine Month Financial Review: Net revenue increased 16% to $157.7 million from $136.3 million in the first nine months of the prior year. Selling, general and administrative (SG&A) expenses increased in the first nine months of 2004 by $9.2 million to $51.3 million. Excluding the effect of the Unibroue acquisition and certain non-recurring costs, SG&A expenses were $54 per hectolitre consistent with the Company’s target for these expenses for the year. Net income was up 27% to $10.5 million, or $0.64 per share on a diluted basis, compared with $8.3 million, or $0.51 per share in the same period in 2003. EBITDA was $26.2 million compared with $21.4 million in the first nine months of 2003, representing a 22% increase.

In late June, the Company announced the completion of the acquisition of the super premium Quebec beer maker Unibroue Inc. The transaction closed on June 30, 2004. Immediately following the closing of the transaction, the Company began implementing its plan to integrate the Sleeman and Unibroue sales and distribution systems. This involved staff reorganizations, facility rationalizations and system changes. The Company planned and executed these activities while continuing to focus on maintaining high quality service to customers. In mid-October, the integration was successfully completed.

The Company launched Sleeman Selections packs in the Western markets. Each pack contains three Sleeman brands providing Sleeman consumers in these growing markets the opportunity to sample more of the Company’s products. Recently, the Company launched the “John Sleeman Presents” program nationally. The first entry in this program is a fine porter beer sold in innovative packaging. Mr. Sleeman continued, “We are extremely pleased with our progress in achieving our strategic and financial goals this year. Our premium brands continue to generate increased sales and margins. The Unibroue acquisition was completed in the quarter and we are confident that the integration of that business into our premium portfolio will generate increased revenue and positive returns.”



05 November, 2004