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Leading Brands, Inc. Announces Q3 And YTD Fiscal 2005 Results
Q3 US Dollar Gross Revenue grows 35%, Q3 Net Loss of $0.04 US per share, YTD Net Loss of $0.03 US per share
VANCOUVER, CANADA - January 13, 2006 - Leading Brands, Inc. (NASDAQ Capital Market: LBIX), North America's only fully integrated premium beverage company, announces results for the third quarter and the first nine months of its fiscal year, both of which ended November 30, 2005.
Gross revenue for the quarter was $9,556,000 US [$11,265,000 Cdn] versus $7,058,000 US [$8,777,000 Cdn] the prior year, a US dollar increase of 35%. The Company's net loss for the third quarter was $551,000 US [$649,000 Cdn] or $0.04 US [$0.04 Cdn] per share, versus a net loss of $434,000 US [$539,000 Cdn] or $0.03 US [$0.04 Cdn] per share in the prior fiscal year.
Year to date gross revenue was $30,108,000 US [$36,507,000 Cdn] versus $27,553,000 US [$36,220,000 Cdn] the prior year, an increase of more than 9%. The Company reported a net loss for the first nine months of the year of $409,000 US [$471,000 Cdn] or $0.03 US [$0.03 Cdn] versus a net income of $475,000 US ($677,000 Cdn) or $0.03 US [$0.04 Cdn] per share in the first nine months of the prior fiscal year.
The difference in net income, when comparing both the quarter and year to date performance, is directly attributable to increases in sales and marketing costs – particularly grocery chain slotting fees. The increased sales and marketing expenses were necessarily invested to support the North American-wide launch of the Company's TrueBlue® blueberry brand. The Company has adopted a policy of expensing all grocery chain slotting fees over a twelve-month period and those expenses were a material cost in both the Q3 and YTD results.
Leading Brands Chairman and CEO Ralph McRae said: "If you add back our increase in spending on sales and marketing, Q3 was a much improved financial result over the same period last year. Most importantly, we are seeing material sales growth resulting from these efforts. We now have more than 10,000 chain grocery stores either carrying or committed to TrueBlue®. That listing base is increasing every month. TrueBlue® is now available across Canada and in 40 U.S. states. That is quite an accomplishment in just one year."
Mr. McRae continued: "During the quarter we also experienced increased volumes in our bottling plants and in the Canadian distribution of our licensed brands, particularly Hansen's Monster Energy® and Fiji Water®. Year to date EBITDA was $786,000 US [$987,000 Cdn]."
Mr. McRae concluded: "So far this fiscal year we have committed to approximately $1,200,000 US in listing fees that are being expensed over a 12 month period. We will continue to incur those costs as we expand distribution of our brands, but as they become fully amortized we should see increasing net contribution from customers that have carried our brands for more than a year."
In conjunction with this release, you are invited to listen to the Company's conference call, which will be held on Friday, January 13, 2006, 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:
1-416-641-6715
The Company will continue to provide operational updates in its monthly newsletter on the first of most months, posted at www.LBIX.com. LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS) AND DEFICIT
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)
Three months Three months Nine months Nine months
ending ending ending ending
November 30 November 30 November 30 November 30
2005 2004 2005 2004
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Gross sales $11,265,126 $8,776,718 $36,506,578 $36,220,233
Less: Discounts, allowances and rebates (479,991) (240,350) (1,171,038) (797,086)
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Net sales 10,785,135 8,536,368 35,335,540 35,423,147
Expenses (Income)
Cost of sales 7,752,784 6,336,228 24,576,519 24,881,824
Selling, general & administration expenses 3,424,782 2,508,504 9,739,464 8,367,022
Depreciation and amortization 286,632 310,154 852,715 917,658
Interest expense 105,739 102,707 304,571 306,349
Other expense (income) 31,900 32 32,084 (884,932)
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Total Expenses 11,601,837 9,257,625 35,505,353 33,587,921
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Net income (loss) before taxes (816,702) (721,257) (169,813) 1,835,226
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Income tax - current 5,142 4,738
Income tax - provision future income tax 167,324 176,692 (301,593) (1,162,898)
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Net income (loss) (649,378) (539,423) (471,406) 677,066
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Deficit, beginning of period,
as previously reported (25,868,793) (25,636,604) (26,046,765) (25,735,980)
Adjustment for change in accounting for
stock-based compensation - - - (1,117,113)
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Accumulated deficit, beginning of period,
as restated (25,868,793) (25,636,604) (26,046,765) (26,853,093)
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Deficit, end of period ($26,518,171) ($26,176,027) ($26,518,171) ($26,176,027)
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EARNINGS (LOSS) PER SHARE
Basic ($0.04) ($0.04) ($0.03) $0.04
Diluted
($0.04) ($0.04) ($0.03) $0.04
Weighted average number of shares outstanding 15,075,069 15,042,807 15,059,469 15,041,042
--------------------------------------------------------------------------------------------------------------------------------------- LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (LOSS) AND DEFICIT
(UNAUDITED)
(EXPRESSED IN UNITED STATES DOLLARS)
Three months Three months Nine months Nine months
ending ending ending ending
November 30 November 30 November 30 November 30
2005 2004 2005 2004
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Gross sales $9,556,435 $7, 057,509 $30,107,593 $27,552,994
Less: Discounts, allowances and rebates (407,186) (193,270) (970,605) (610,286)
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Net sales 9,149,249 6,864,239 29,136,988 26,942,708
Expenses (Income)
Cost of sales 6,576,844 5,095,069 20,276,730 18,945,884
Selling, general & administration expenses 2,905,312 2,017,131 8,046,950 6,393,623
Depreciation and amortization 243,155 249,400 703,798 702,881
Interest expense 89,701 82,589 251,515 234,572
Other expense (income) 27,061 26 27,214 (664,936)
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Total Expenses 9,842,073 7,444,215 29,306,207 25,612,024
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Net income (loss) before taxes (692,824) (579,976) (169,219) 1,330,684
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Income tax - current - 4,135 - 3,835
Income tax - provision future income tax 141,944 142,081 (239,326) (859,514)
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Net income (loss) (550,880) (433,760) (408,545) 475,005
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Deficit, beginning of period,
as previously reported (17,592,423) (17,451,636) (17,734,758) (17,524,051)
Adjustment for change in accounting for
stock-based compensation - - - (836,350)
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Accumulated deficit, beginning of period,
as restated (17,592,423) (17,451,636) (17,734,758) (18,360,401)
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Deficit, end of period ($18,143,303) ($17,885,396) ($18,143,303) ($17,885,396)
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EARNINGS (LOSS) PER SHARE
Basic ($0.04) ($0.03) ($0.03) $0.03
Diluted
($0.04) ($0.03) ($0.03) $0.03
Weighted average number of shares outstanding 15,075,069 15,042,807 15,059,469 15,041,042
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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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