DEAR FELLOW SHAREHOLDERS:
As we just concluded a rather lengthy conference call last week and many good questions were asked (and hopefully adequately answered) I won’t spend a lot of time in this letter dwelling on ‘current events’.
One thing that struck me this week as the value of the Canadian dollar rose above $0.90 US, was whether or not ‘the market’ understood what a positive impact that has on the relative value of our Company. The great majority of our assets and revenues are in Canada and initially recorded in Canadian dollars. On the other hand, our share price is denominated in US dollars. As the Canadian dollar has strengthened against the US over the past several years, the relative US dollar value of our company has, all things just remaining equal, increased.
Recent weeks excepted, the last time that our share price closed at these levels was around January 15, 2003. The exchange rate then was approximately $0.65, translating $2.75 US a share into $4.23 Cdn. At $0.90 today, that same $2.75 price is equal to only $3.06 Cdn, or a difference of $1.17 Cdn per share. Put another way, the ‘Canadian dollar market value’ of our company is $1.17 Cdn a share less today than it was more than three years ago, even though the US dollar per share market value is the same. I will let you be the judge of whether our Company and its prospects are stronger today than they were in January, 2003, but it seems that regardless of that conclusion we receive little consideration for the positive impact of that exchange difference.
The US TREK re-launch was delayed a couple of weeks due to a specific raw material supply issue that we have dealt with. Pre-Summer sales growth continues to be strong, both in Canada and the US. We have just hired a regional sales manager for the Northeast US, so you will hopefully be seeing a greater presence of our products there in short order. We are intent upon doing the same soon in the mid-West.
Thank you for your continued support.
LEADING BRANDS, INC.
Ralph D. McRae
Chairman & CEO
We Build Brands™
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.
Any non-GAAP financial measures referenced in this release such as “EBITDA”, “cash inflow from operations” or the like do not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers.