VANCOUVER, British Columbia, Jan. 14, 2016 (GLOBE NEWSWIRE) — Leading Brands, Inc. (NASDAQ:LBIX), North America’s only fully integrated healthy branded beverage company, announces results for its third quarter of fiscal 2015, which ended November 30, 2015. All financial amounts are denominated in Canadian dollars, with all financial figures rounded to the nearest $000.
Sales of HappyWater® increased almost 200% in Q3 this year, versus Q3 last year. In Q4 the company commenced distribution of HappyWater® in the United States and that revenue is not reflected in those statistics.
Reported Q3 2015 net loss was $(385,000) or $(0.13) per share ($(0.13) fully diluted) versus net loss of $(78,000) or $(0.03) per share in the same quarter of fiscal 2015. Year-to-date (“YTD”) net loss was $(809,000) or $(0.28) per share ($(0.28) fully diluted) versus net income of $515,000 or $0.18 per share in the first nine months of last year.
This change is directly attributable to a combination of:
- A reduction in co-pack fees under the company’s new contract with its principal customer;
- Reduced volume from the company’s principal co-pack customer;
- Substantial incremental costs associated with the company’s 2015 AGM; and
- Amortization of a major new listing fee for the company’s branded beverage products.
Effective Q4 2015 the Company has implemented cost saving measures (that took three quarters to fully effect) to offset much of the reduction in co-pack fees.
Non-GAAP Net Income (Loss) before SBC is determined as follows:
| Q3 2015 | Q3 2014 | YTD 2015 | YTD 2014 | |||||||||||
| Net Income (Loss) | $ | (385,000 | ) | $ | (78,000 | ) | $ | (809,000 | ) | $ | 515,000 | |||
| Add Back SBC | – | 2,000 | 84,000 | 16,000 | ||||||||||
| Net income (loss) before SBC | $ | (385,000 | ) | $ | (76,000 | ) | $ | (725,000 | ) | $ | 531,000 | |||
Non-GAAP Net Income (Loss) per share before SBC is determined as follows:
| Q3 2015 | Q3 2014 | YTD 2015 | YTD 2014 | |||||||||||
| Net Income (Loss) | $ | (0.13 | ) | $ | (0.03 | ) | $ | (0.28 | ) | $ | 0.18 | |||
| Add Back SBC | – | – | 0.03 | 0.01 | ||||||||||
| Net income (loss) before SBC – Basic | $ | (0.13 | ) | $ | (0.03 | ) | $ | (0.25 | ) | $ | 0.19 | |||
Pro-forma results for EBITDAS, as defined below, are determined as follows:
| Q3 2015 | Q3 2014 | YTD 2015 | YTD 2014 | |||||||||||||
| Net Income (Loss) | $ | (385,000 | ) | $ | (78,000 | ) | $ | (809,000 | ) | $ | 515,000 | |||||
| Add Back: | ||||||||||||||||
| Interest, net | (1,000 | ) | (4,000 | ) | (4,000 | ) | (12,000 | ) | ||||||||
| Depreciation and amortization | 177,000 | 184,000 | 520,000 | 539,000 | ||||||||||||
| Non-cash stock based compensation | – | 2,000 | 84,000 | 16,000 | ||||||||||||
| Non-cash income tax expense | (195,000 | ) | (39,000 | ) | (260,000 | ) | 176,000 | |||||||||
| Total Add Backs | (19,000 | ) | 143,000 | 340,000 | 719,000 | |||||||||||
| EBITDAS | $ | (404,000 | ) | $ | 65,000 | $ | (469,000 | ) | $ | 1,234,000 | ||||||
EBITDAS per share reconciles to earnings per share as follows:
| Q3 2015 | Q3 2014 | YTD 2015 | YTD 2014 | |||||||||||
| Net Income (Loss) | $ | (0.13 | ) | $ | (0.03 | ) | $ | (0.28 | ) | $ | 0.18 | |||
| Add Back: | ||||||||||||||
| Interest, net | – | – | – | – | ||||||||||
| Depreciation and amortization | 0.06 | 0.06 | 0.18 | 0.18 | ||||||||||
| Non-cash stock based compensation | – | – | 0.03 | 0.01 | ||||||||||
| Non-cash income tax expense | (0.07 | ) | (0.01 | ) | (0.09 | ) | 0.06 | |||||||
| Total Add Backs | (0.01 | ) | 0.05 | 0.12 | 0.25 | |||||||||
| EBITDAS | $ | (0.14 | ) | $ | 0.02 | $ | (0.16 | ) | $ | 0.43 | ||||
Gross profit margin for the quarter was 18.4%, down from 39.1% in the same quarter last year, due to across the board reduction in per case co-pack fees, reduction of co-pack volume and new listing fees and promotions for the company’s branded products. Gross revenue for Q3 2015 was $2,371,000, versus $2,963,000 in the comparative period of last year. A decrease in revenue for co-packing services was the primary contributor to both the drop in revenue and gross profit margin in the quarter.
Discounts, rebates and slotting fees were $149,000 in Q3 2015, an increase of $36,000 compared to the same period of the prior year as a result of new listing fees for HappyWater® and offset by lower discounts on co-packing service. Selling, General and Administrative Expenses (“SG&A”) were $910,000 in Q3 of fiscal 2015, versus $1,117,000 in Q3 of the previous year.
As at November 30, 2015 the Company had cash on hand of approximately $706,000 and the Company had outstanding 2,871,134 common shares.
About Leading Brands, Inc.
Leading Brands, Inc. (NASDAQ:LBIX) is North America’s only fully integrated healthy beverage company. Leading Brands creates, designs, bottles, distributes and markets its own proprietary premium beverage brands via its unique Integrated Distribution System (IDS)™ which involves the Company finding the best and most cost-effective route to market.
Non-GAAP Measures
Any non-GAAP financial measures referenced in this release do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers.
EBITDAS is a non-GAAP financial measure. EBITDAS is defined as net income (loss) before income taxes, interest expense, depreciation and amortization and stock-based compensation. EBITDAS should not be construed as a substitute for net income (as determined in accordance with GAAP) for the purpose of analyzing operating performance, as EBITDAS is not defined by GAAP. However, the Company regards EBITDAS as a complement to net income and income before taxes.
Forward Looking Statements
Certain information contained in this press release includes forward-looking statements. Words such as “believe”, “expect,” “will,” or comparable terms, are intended to identify forward-looking statements concerning the Company’s expectations, beliefs, intentions, plans, objectives, future events or performance and other developments. All forward-looking statements included in this press release are based on information available to the Company on the date hereof. Such statements speak only as of the date hereof. Important factors that could cause actual results to differ materially from the Company’s estimations and projections are disclosed in the Company’s securities filings and include, but are not limited to, the following: general economic conditions, weather conditions, changing beverage consumption trends, pricing, availability of raw materials, economic uncertainties (including currency exchange rates), government regulation, managing and maintaining growth, the effect of adverse publicity, litigation, competition and other risk factors described from time to time in securities reports filed by Leading Brands, Inc. For all such forward-looking statements, we claim the safe harbor for forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
©2016 Leading Brands, Inc.
This news release is available at www.LBIX.com
(table follows)
| LEADING BRANDS, INC. | |||||||||||||||||
| CONDENSED CONSOLIDATED INTERIM STATEMENT OF INCOME (LOSS) | |||||||||||||||||
| (UNAUDITED) | |||||||||||||||||
| (EXPRESSED IN CANADIAN DOLLARS) | |||||||||||||||||
| Three months ended | Nine months ended | ||||||||||||||||
| November 30, 2015 | November 30, 2014 | November 30, 2015 | November 30, 2014 | ||||||||||||||
| Gross Revenue | $ | 2,371,358 | $ | 2,962,724 | $ | 9,442,367 | $ | 11,057,233 | |||||||||
| Less: Discount, rebates and slotting fees | (149,394 | ) | (113,438 | ) | (348,198 | ) | (380,229 | ) | |||||||||
| Net Revenue | 2,221,964 | 2,849,286 | 9,094,169 | 10,677,004 | |||||||||||||
| Cost of sales | 1,814,056 | 1,734,210 | 6,279,967 | 6,066,457 | |||||||||||||
| Operations, selling, general & administration expenses | 910,427 | 1,116,599 | 3,419,661 | 3,457,177 | |||||||||||||
| Depreciation of property, plant and equipment | 177,194 | 183,877 | 519,693 | 538,761 | |||||||||||||
| Interest, net | (663 | ) | (4,324 | ) | (4,262 | ) | (11,515 | ) | |||||||||
| Change in fair value of derivative liability | (101,072 | ) | (64,470 | ) | (54,416 | ) | (74,673 | ) | |||||||||
| Loss on disposal of assets | 1,757 | 379 | 1,757 | 9,488 | |||||||||||||
| 2,801,699 | 2,966,271 | 10,162,400 | 9,985,695 | ||||||||||||||
| Net income (loss) before taxes | (579,735 | ) | (116,985 | ) | (1,068,231 | ) | 691,309 | ||||||||||
| Income tax expense | (194,681 | ) | (39,173 | ) | (259,620 | ) | 176,457 | ||||||||||
| Net and comprehensive income (loss) | $ | (385,054 | ) | $ | (77,812 | ) | $ | (808,611 | ) | $ | 514,852 | ||||||
| Earnings per share | |||||||||||||||||
| Basic income (loss) per share | $ | (0.13 | ) | $ | (0.03 | ) | $ | (0.28 | ) | $ | 0.18 | ||||||
| Weighted average number of shares outstanding – basic | 2,871,599 | 2,929,965 | 2,885,457 | 2,922,232 | |||||||||||||
| Fully diluted income (loss) per share | $ | (0.13 | ) | $ | (0.03 | ) | $ | (0.28 | ) | $ | 0.16 | ||||||
| Weighted average number of shares outstanding – diluted | 3,116,460 | 3,216,229 | 3,110,008 | 3,213,651 | |||||||||||||
CONTACT: CONTACT: Leading Brands, Inc. Tel: (604) 685-5200 Email: [email protected]