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Leading Brands, Inc. Announces Q1 2005 Financial Results

Net Income of $0.02 US per share

VANCOUVER, CANADA - June 27, 2005 - LEADING BRANDS, INC. (NASDAQ: LBIX), North America's only fully integrated premium beverage company, announces results for the first quarter of its 2005 fiscal year, ended May 31, 2005.

Net Income was $300,000US [$371,000 Cdn] or $0.02US [$0.02 Cdn] per share, versus net income of $396,000US [$534,000Cdn] or $0.03US [$0.04Cdn] per share in Q1 of 2004.  Gross revenue for the quarter was $9,156,000US [$11,313,000Cdn] compared to $9,383,000US [$12,654,000Cdn] in the same period last year.  The comparable decrease in revenue was attributable to lower co-pack revenue in the Company's plants during April and May 2005.  This was caused by cooler and wetter than usual weather in Western Canada this spring and the discontinuance of certain co-pack agreements referenced previously.  The Company correspondingly experienced substantial growth in its distribution business with overall double-digit increases in sales of its branded and licensed products.

Leading Brands Chairman and CEO Ralph McRae said: "Q1 is usually dominated by our plants and results in Q2 are normally dictated by our distribution business.  So far, that pattern has repeated itself this year.  Our co-pack customers sell primarily in Western Canada, where inclement spring weather was a factor in dampening volumes this quarter.  On the other hand, our distribution business is spread across North America and consequently local weather conditions usually average out.  Although we are seeing significant increases in our branded sales, they were not - partially due to the season - sufficient to overtake the decline in plant volume.  We have every indication that will not be an issue in Q2."

Mr. McRae continued:  "We are seeing rather extraordinary growth in the US, with TrueBlue® leading the way.  Monthly year over year sales growth averaged 250% in the US this past quarter.  That increase was driven both by new chain store listings and repeat sales growth."

Mr. McRae concluded:  "When analyzing our financial results it would be an over-simplification to say that our net income fell $100,000 because our promotional expenditures grew by a like amount.  Although we have materially increased sales and marketing expenses to support our brand rollouts, the fact is that each dollar of co-pack revenue generates a higher percentage gross profit for us than branded sales because the former carries little in the way of raw materials cost.  That impacts us most in Q1.  Continuing sales growth should more than make up for that first quarter impact in due course."

In conjunction with this release, you are invited to listen to the Company's conference call, which will be held on Monday, June 27, 2005, 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:
1-416-641-6675

LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(EXPRESSED IN UNITED STATES DOLLARS)                          May 31        May 31
                                                                2005          2004
Gross sales                                              $ 9,155,742   $ 9,382,702
Less: Discounts, allowances and rebates                    (178,908)      (97,671)
Net sales                                                  8,976,834     9,285,031
Expenses (Income)
Cost of sales                                              5,892,078     6,302,098
Selling, general & administration expenses                 2,260,047     1,912,098
Depreciation and amortization                                228,532       224,065
Interest expense                                              78,696        77,248
Other expense (income)                                         (257)         1,866
Total Expenses                                             8,459,096     8,517,375
Net income before taxes                                      517,738       767,656
Income tax - provision future income tax                   (217,302)     (371,320)
Net Income after income taxes                                300,436       396,336
Deficit, beginning of period, as previously reported    (17,734,758)  (17,524,051)
Adjustment for change in accounting for stock-based compensation   -     (836,350)
Accumulated deficit, beginning of period, as restated   (17,734,758)  (18,360,401)
Deficit, end of period                                  (17,434,322)  (17,964,065)
EARNINGS PER SHARE
   Basic                                                      $ 0.02        $ 0.03
   Diluted                                                    $ 0.02        $ 0.03
Weighted average number of shares outstanding             15,045,069    15,040,169

LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)                               May 31        May 31
                                                                2005          2004
Gross sales                                             $ 11,312,835  $ 12,653,512
Less: Discounts, allowances and rebates                    (221,058)     (131,719)
Net sales                                                 11,091,777    12,521,793
Expenses (Income)
Cost of sales                                              7,280,252     8,499,009
Selling, general & administration expenses                 2,792,515     2,578,655
Depreciation and amortization                                282,375       302,175
Interest expense                                              97,235       104,176
Other expense (income)                                         (317)         2,517
Total Expenses                                            10,452,060    11,486,532
Net income before taxes                                      639,717     1,035,261
Income tax - provision future income tax                   (268,498)     (500,762)
Net Income after income taxes                                371,219       534,499
Deficit, beginning of period, as previously reported    (26,046,765)  (25,735,980)
Adjustment for change in accounting for stock-based compensation   -   (1,117,113)
Accumulated deficit, beginning of period, as restated   (26,046,765)  (26,853,093)
Deficit, end of period                                  (25,675,546)  (26,318,594)
EARNINGS PER SHARE
   Basic                                                      $ 0.02        $ 0.04
   Diluted                                                    $ 0.02        $ 0.04
Weighted average number of shares outstanding             15,045,069    15,040,169

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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