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Leading Brands, Inc. Announces Q3 Results; 20% Increase in Revenue for the Third Quarter
VANCOUVER, CANADA - December 27, 2002 - LEADING BRANDS, INC. LBIX (TSX:LBI), Canada's largest independent, fully integrated premium beverage company, announces its financial results for the third quarter of its 2002 fiscal year ended February 28, 2003.
Revenue for the quarter ended November 30, 2002 rose to $16,996,000 Cdn ($10,791,000US) from $14,214,000Cdn ($8,926,000US) in the prior year, a gain of 20%. The net loss for the quarter was $668,000Cdn ($424,000US) or $0.05Cdn ($0.03US) per share versus net income of $86,000Cdn ($54,000US) or $0.01Cdn ($nil US) per share for the third quarter ending November 30, 2001.
Year to date revenues were $59,069,000Cdn ($37,782,000US), up from $51,368,000Cdn ($33,006,000US) last year. Net income for the nine months of the year was $1,614,000Cdn ($1,038,000US) versus $2,169,000Cdn ($1,404,000US) in the first three quarters of 2001.
The rise in quarterly revenue is almost equally attributable to increased revenue from co-pack customers and sales of TREK™ Optimized Performance Beverages™ in the United States. Profitability for the quarter was impacted by increased SG&A costs of expanding into the United States market and corresponding introductory promotional programs for the Company's major new products.
Leading Brands Chairman & CEO Ralph D. McRae said: "Although overall pleased with our continued growth and evolution as a company, I am disappointed with our results for this quarter. The past three months saw a number of important developments at Leading Brands: the launch of PEZ® 100% Juices™, the introduction of TREK™ NITRO™, the signing of four significant new bottling agreements comprising 5.5 million new cases of production for fiscal 2003, a landmark licensing and marketing arrangement with Trek Bicycle Corporation, new listings for both TREK™ and PEZ® at a variety of chains, including 7-Eleven, Sunoco, Canada Safeway and Albertsons and new distribution across 25 US states."
Mr. McRae continued: "Throughout the Summer and Fall we were gearing up to meet demand for TREK™. By the time our production capacity increased in November many new distributors pushed back launching to early 2003, rather than run into the year end Holidays. That slowed our expansion in the late Fall. With that issue now behind us, we are seeing increased demand in Q4, with more than 35 additional markets scheduled to come on line before the end of our fiscal year in February. As I reflect on the quarter, I believe that we have used that time to make a sound investment in our future."
LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS)
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)
Three months ending Nine months ending
November 30, November 30,
2002 2001 2002 2001
----------------------------------------------------------------------
Sales $ 16,995,918 $ 14,213,983 $ 59,068,751 $ 51,367,627
Expenses (Income)
Cost of sales 14,295,784 11,207,083 46,645,376 39,933,263
Operations,
selling, general
& administration
expenses 3,255,199 2,133,909 10,630,537 7,141,772
Depreciation and
amortization 419,152 569,910 1,149,897 1,721,767
Interest expense 164,900 198,879 519,382 693,168
Other (1,111) 17,716 (9,188) (291,397)
----------------------------------------------------
18,133,924 14,127,497 58,936,004 49,198,573
----------------------------------------------------
Net income (loss)
before taxes (1,138,006) 86,486 132,747 2,169,054
Income Taxes (470,000) - (1,481,000) -
----------------------------------------------------
Net income (loss)
after income taxes (668,006) 86,486 1,613,747 2,169,054
----------------------------------------------------
Deficit, beginning
of period (11,177,115) (13,441,668) (13,438,168) (15,524,236)
Preferred Share
Dividends 10,350 - 31,050 -
----------------------------------------------------
Deficit, end of
period (11,855,471) (13,355,182) (11,855,471) (13,355,182)
----------------------------------------------------
EARNINGS PER SHARE
Basic $ (0.05)$ 0.01 $ 0.12 $ 0.16
Fully diluted $ (0.05)$ 0.01 $ 0.09 $ 0.15
Weighted average
number of shares
outstanding 13,635,015 13,558,878 13,590,442 13,606,377
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LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS)
(UNAUDITED)
(EXPRESSED IN UNITED STATES DOLLARS)
Three months ending Nine months ending
November 30, November 30,
2002 2001 2002 2001
----------------------------------------------------------------------
Sales $ 10,791,059 $ 8,926,139 $ 37,782,472 $ 33,005,847
Expenses (Income)
Cost of sales 9,076,688 7,037,857 29,829,874 25,653,897
Operations, selling,
general
& administration
expenses 2,066,793 1,340,058 6,799,043 4,585,784
Depreciation and
amortization 266,128 357,894 734,603 1,105,050
Interest expense 104,699 124,893 331,967 445,432
Other (706) 11,125 (5,840) (187,908)
----------------------------------------------------
11,513,602 8,871,827 37,689,647 31,602,255
----------------------------------------------------
Net income (loss)
before taxes (722,543) 54,312 92,825 1,403,592
Income Taxes (298,412) - (945,579) -
----------------------------------------------------
Net income (loss)
after income taxes (424,131) 54,312 1,038,404 1,403,592
----------------------------------------------------
Deficit, beginning
of period (7,955,095) (9,389,591) (9,404,297) (10,738,871)
Preferred Share
Dividends 6,571 - 19,905 -
----------------------------------------------------
Deficit, end of
period (8,385,797) (9,335,279) (8,385,798) (9,335,279)
----------------------------------------------------
EARNINGS PER SHARE
Basic $ (0.03)$ - $ 0.08 $ 0.10
Fully diluted $ (0.03)$ - $ 0.06 $ 0.09
Weighted average
number of shares
outstanding 13,635,015 13,558,878 13,590,442 13,606,377
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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