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Leading Brands, Inc. Announces Q3 Results
Company Reports Comparable YTD US Dollar Revenue Growth of 19% Net Loss Before Taxes Improves Over Prior Year
VANCOUVER, CANADA - January 20, 2004 - LEADING BRANDS, INC. (NASDAQ: LBIX), North America's only fully integrated premium beverage company, announces results for its 2003 fiscal third quarter ended November 30, 2003.
Revenue for the quarter was $9,370,000US ($12,490,000Cdn) compared to $10,791,000US ($16,996,000Cdn) in the same quarter of the prior year. Net Loss before taxes was $597,000US ($795,000Cdn) or $0.04US ($0.05Cdn) per share, compared to a net loss before taxes of $722,000US ($1,138,000Cdn) in Q3 of last year. The quarterly net loss was directly attributable to the Company's US subsidiary and the reorganization of that operation during the Fall where certain severance expenses and continuances were incurred. The Company's Canadian operations broke even for the quarter, which is comparable to its best third quarter ever.
Year to date revenues were $34,137,000US ($47,354,000Cdn), compared to $37,782,000US ($59,068,000Cdn) last year. Net loss for the first three quarters of the year was $262,000US ($336,000Cdn) versus net income of $1,038,000US ($1,614,000Cdn) after the third quarter of 2002.
Leading Brands Chairman and CEO Ralph D. McRae said: "As we previously announced, commencing this fiscal year, our largest co-pack customer changed the way in which we bill them from a full case cost to co-pack fee basis. That simple adjustment reduced our revenues by more than $4,100,000US ($5,500,000Cdn) in Q3 alone and $11,000,000US ($15,100,000Cdn) over the first three quarters of the year, but did not impact net income. If the status quo had been maintained, we would have reported record YTD revenues of approximately $45,000,000US ($62,000,000Cdn), a US dollar denominated increase over the same period last year of 19%. While such a large percentage of our volume is concentrated in our bottling operations, we will from time to time experience revenue fluctuations of this nature. Again, they do not impact our profitability, just our stated revenue."
Mr. McRae added: "During the quarter we set about the task of restructuring our US operations. Recent losses there were completely unnecessary and we have initiated the personnel changes we believe will right that course. Our efforts to fix that division are now virtually complete. Our US management needs simply to concentrate on generating profitable sales in that market. We are also analyzing the relevance of certain licensed brands to our company and are taking steps to rationalize our US product mix. We are strongly committed to developing our own brands and are particularly optimistic concerning the initial excitement we have witnessed in regards the launch of our new Soy2O™ brand. We are presently rolling out the new TREK® Nitro flavor and are allocating resources to profitably building a strong brand identity in specific key markets.
"After a year of intense effort, our plants are back running as efficiently as they did before the changes of 2002-03. We are looking forward to reaping the benefits of those changes through the coming year."
Mr. McRae concluded: "Over the past three years we had invested more than $5,000,000Cdn in our plant and equipment to increase processing speeds and efficiencies. Most of that investment came from our working capital. At the end of December we restructured our loan facilities with our principal banker to re-advance more than $2,000,000 Cdn on our long term loans, which in turn dramatically improved our current ratio going into Q4. As an interesting side-note, Stagnito's 2003 Food & Beverage Report ranked Leading Brands as the World's 75th largest beverage company with business in the US. That is no small achievement in less than 10 years of operations."
In conjunction with this release, you are invited to listen to the Company's conference call, which will be held on Tuesday, January 20, 2004, 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
The Company will continue to provide updates in its newsletter on the first of most months, posted at www.LBIX.com. LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS)
(Unaudited)
(EXPRESSED IN CANADIAN DOLLARS)
Three months Three months Nine months Nine months
ending November ending November ending November ending November
30, 2003 30, 2002 30, 2003 30, 2002
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Sales $ 12,490,163 $ 16,995,918 $ 47,354,806 $ 59,068,751
Expenses (Income)
Cost of sales 9,726,051 14,295,784 36,012,902 46,645,376
Operations, selling, general
& administration expenses 3,039,739 3,255,199 11,058,965 10,630,537
Depreciation and amortization 398,152 419,152 1,203,917 1,149,897
Interest expense 109,987 164,900 350,086 519,382
Other 11,568 (1,111) 11,568 (9,188)
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13,285,497 18,133,924 48,637,438 58,936,004
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Net income (loss) before taxes (795,334) (1,138,006) (1,282,632) 132,747
Current income taxes (40,269) - (455,239) -
Future Income Taxes 76,024 470,000 1,402,024 1,481,000
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Net Income after income taxes (759,579) (668,006) (335,847) 1,613,747
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Deficit, beginning of period (22,789,132) (11,177,115) (23,212,864) (13,438,168)
Preferred Share Dividends - 10,350 - 31,050
---------------------------------------------------------------
Deficit, end of period (23,548,711) (11,855,471) (23,548,711) (11,855,471)
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EARNINGS PER SHARE
Basic $ (0.05) $ (0.05) $ (0.02) $ 0.12
Fully diluted $ (0.05) $ (0.05) $ (0.02) $ 0.09
Weighted average number of shares
outstanding 15,037,971 13,635,015 14,919,597 13,590,442
----------------------------------------------------------------------------------------------------------------------- LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS)
(Unaudited)
(EXPRESSED IN UNITED STATES DOLLARS)
Three months Three months Nine months Nine months
ending November ending November ending November ending November
30, 2003 30, 2002 30, 2003 30, 2002
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Sales $ 9,369,965 $ 10,791,059 $ 34,137,067 $ 37,782,472
Expenses (Income)
Cost of sales 7,296,362 9,076,688 25,969,953 29,829,873
Operations, selling, general
& administration expenses 2,280,375 2,066,793 7,985,255 6,799,044
Depreciation and amortization 298,689 266,128 870,908 734,603
Interest expense 82,511 104,699 253,295 331,967
Other 8,678 (706) 8,678 (5,840)
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9,966,615 11,513,602 35,088,089 37,689,647
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Net income (loss) before taxes (596,650) (722,543) (951,022) 92,825
Current income taxes (30,209) - (331,721) -
Future Income Taxes 57,032 298,412 1,020,485 945,579
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Net Income after income taxes (569,827) (424,131) (262,258) 1,038,404
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Deficit, beginning of period (15,368,992) (7,955,095) (15,676,561) (9,404,297)
Preferred Share Dividends - 6,571 - 19,904
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Deficit, end of period (15,938,819) (8,385,797) (15,938,819) (8,385,797)
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EARNINGS PER SHARE
Basic $ (0.04) $ (0.03) $ (0.02) $ 0.08
Fully diluted $ (0.04) $ (0.03) $ (0.02) $ 0.06
Weighted average number of shares
outstanding 15,037,971 13,635,015 14,919,597 13,590,442
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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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