E-Malt.com News article: Canada, AB: Big Rock Brewery announces financial results for 2020

Big Rock Brewery Inc. announced on March 11 its financial results for the three months and year ended December 30, 2020.

"We are pleased to report continued positive financial and operational results, with fourth quarter and fiscal year EBITDA (defined herein) of C$0.5 million and $C5.1 million or an improvement of C$1.1 million and C$6.2 million, respectively," said President & CEO Wayne Arsenault. "Despite the immense challenges presented by the COVID-19 pandemic, our annual results demonstrate our organization's ability to successfully adapt to change. We were able to successfully pivot the business in a timely manner to capitalize on opportunities through our wholesale channels while limiting our downside exposure to our retail on-premise channels being restricted or closed throughout most of the year. In addition, the Corporation was able to successfully expand its product offerings into the rapidly growing ready-to-drink ("RTD") market which not only compensated for the decline in on-premise volumes, but positions the Corporation for growth in this emerging category in 2021 and beyond. As the Corporation exits a challenging 2020 with its best results in seven years, the Corporation's turnaround strategy has been validated and is now shifting to growth beginning with the recently announced $8.8 million capital plan and credit facility expansion where Big Rock plans to leverage its strong financial position toward accelerating growth in 2022."

For the three months ended December 30, 2020, compared to the three months ended December 30, 2019, the company reported:

• net revenue increased by 8.1%, from C$9.5 million to C$10.3 million;
• sales volumes increased 5.6% from 37,361 hl to 39,446 hl;
• earnings before interest, taxes, depreciation and amortization ("EBITDA") increased by C$1.1 million, to C$0.5 million;
• net loss of C$1.4 million versus a net loss of C$1.3 million which was primarily driven by a non-cash impairment of its Ontario assets of C$1.5 million; and
• operating loss of C$1.8 million, compared to an operating loss of C$1.6 million.

For the year ended December 30, 2020 compared to the year ended December 30, 2019, the company reported:

• net revenue increased 3.1%, from C$42.7 million to C$44.0 million;
• sales volumes increased 1,433 hl, from 171,563 hl to 172,996 hl;
• positive EBITDA of C$5.1 million compared to negative EBITDA of C$1.1 million;
• a reduction in current and long-term debt of C$2.0 million as the company continued to focus on using its cash flow to pay down debt;
• net loss decreased to C$0.7 million from a net loss of C$2.9 million, an improvement of C$2.2 million despite the impact of the C$1.5 million impairment recorded during the fourth quarter;
• operating loss of C$0.1 million compared to an operating loss of C$5.1 million;
• keg sales volumes decreased by 55% related to on-premise closures due to COVID-19;
• damage and obsolete inventories increased from C$0.8 million to C$2.1 million; and
• receipt of C$0.9 million in government assistance under the Canada Emergency Wage Subsidy Program.

As at December 30, 2020, the Corporation had a cash balance of C$0.3 million, was undrawn on its operating credit facility of C$5 million and was C$2.9 million drawn on its C$6 million term facility, affording Big Rock significant financial flexibility. Subsequent to the corporation's 2020 fiscal year-end, the corporation announced the expansion of its credit facilities to a total of C$16 million to support its 2021 strategic capital plan.


10 March, 2021