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Leading Brands, Inc. Announces Fiscal 2002 Year End Results Revenue Increased 15%
VANCOUVER, CANADA - June 17, 2003 - LEADING BRANDS, INC. (NASDAQ: LBIX), North America’s only fully integrated premium beverage company, announces results for its 2002 fiscal year ended February 28, 2003.
Revenue for the year rose 15% to $73,808,000Cdn ($47,362,000US) from $64,371,000Cdn ($41,182,000US) the prior year. Net income was $427,000Cdn ($274,000US) before non-cash write-downs associated with the discontinuation of the Company’s Quick Home Delivery service. Those write-downs were of $10,167,000Cdn ($6,524,000US), resulting in a loss per share of $0.71Cdn ($0.46US). Net income in the 2001 fiscal year was $2,093,000Cdn ($1,339,000US) or $0.15Cdn ($0.10US).
Leading Brands Chairman and CEO Ralph McRae said: “Fiscal 2002 saw both the most exciting and difficult decisions in our Company’s short history. The most exciting was our July 2002 expansion into the United States, which increased almost seven fold our penetrable market size. The most difficult was our decision to suspend operations at Quick.”
“During 2002, our operating results were burdened both by the costs of supporting the Quick operation and the startup of our US distribution. Both of those factors should be either eliminated or reduced this year.”
“From a standing start in July 2002 we have built a network of 90 distributors directly serving the majority of the US. We are continuing to build distribution of our TREK® Optimized Performance Beverage™ throughout the US and Canada. Our Pez® 100% Juice™ brand is now in more than 7,000 convenience stores nationally and in July will start testing in several Wal-Mart®, Sam’s Club® and K-Mart® stores. During its introductory month in the 7-Eleven chain, our new Mad Croc™ energy drink rocketed to number three in that trend-setting chain’s energy category. We have also shipped our first loads of Caesar’s Bloody Caesar® cocktail mixes to the US and Mexico.”
“Colder and wetter weather prevailed in much of the Northeast US during our fourth quarter of 2002 and into Q1, 2003. That negatively impacts our sales. During the same period we installed and commissioned new production lines, modified existing lines and added new bottling customers. Those installation and commissioning processes, although initially costly, are necessary to support future growth.”
“Finally, through Q4 of 2002 the Canadian/US dollar exchange rate deteriorated sharply. As we purchase many of our raw materials and ingredients in US dollars for re-sale in Canadian dollars that exchange move impacted our margins. Conversely, early in Q1 of 2003 that exchange rate reversed markedly in our favor. In general, we are pleased that the bulk of our one time, clean up items were dealt with in 2002, and look forward to a year of strong growth in 2003.”
In conjunction with this release, you are invited to listen to the Company’s conference call, which will be held on Tuesday, June 17, 2003, 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
LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS)
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)
February 28 February 28
2003 2002
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Sales $ 73,808,314 $ 64,370,879
Expenses
Cost of sales 59,234,777 50,133,777
Selling, general & administration expenses 13,991,004 9,496,942
Depreciation and amortization 1,600,932 1,979,503
Interest expense 645,170 978,793
Other (9,188) (311,108)
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Total Expenses 75,462,695 62,277,907
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Net income (loss) before taxes (1,654,381) 2,092,972
Future Income Taxes 2,081,000 -
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Net income after income taxes 426,619 2,092,972
Write down of investment (10,166,815) -
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Net Income (Loss) (9,740,196) 2,092,972
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Deficit, beginning of period (13,438,168) (15,524,240)
Preferred Share Dividends 34,500 6,900
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Deficit, end of period (23,212,864) (13,438,168)
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EARNINGS PER SHARE
Basic $ (0.71) $ 0.15
Fully diluted $ (0.71) $ 0.15
Weighted average number of shares
outstanding 13,754,598 13,593,310
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LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS)
(UNAUDITED)
(EXPRESSED IN UNITED STATES DOLLARS)
February 28 February 28
2003 2002
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Sales $ 47,361,598 $ 41,181,549
Expenses
Cost of sales 38,009,995 32,073,301
Selling, general & administration expenses 8,977,802 6,075,710
Depreciation and amortization 1,027,292 1,266,397
Interest expense 413,996 626,186
Other (5,897) (199,033)
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Total Expenses 48,423,188 39,842,561
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Net income (loss) before taxes (1,061,590) 1,338,988
Future Income Taxes 1,335,344 -
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Net income after income taxes 273,754 1,338,988
Write down of investment (6,523,880) -
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Net Income (Loss) (6,250,126) 1,338,988
Deficit, beginning of period (9,404,297) (10,738,871)
Preferred Share Dividends 22,138 4,414
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Deficit, end of period (15,676,561) (9,404,297)
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EARNINGS PER SHARE
Basic $ (0.46) $ 0.10
Fully diluted $ (0.46) $ 0.10
Weighted average number of shares
outstanding 13,754,598 13,593,310
About Leading Brands, Inc.
Leading Brands, Inc. (NASDAQ:LBIX) is North America’s only fully integrated premium beverage company. The Company’s unique Integrated Distribution System (IDS) ™ offers turnkey, one-stop shopping to food and beverage brand owners, including manufacturing, distribution, sales/marketing and licensing. In addition, Leading Brands produces their own line of beverages such as TrueBlue®, LiteBlue®, TREK® Natural Sports Drinks, NITRO® Energy Drinks, INFINITY® Health Water™, Country Harvest® Juices, and Caesar’s® Cocktails.
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.
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