Leading Brands, Inc. Announces Q1 Results
Record Cash Inflow from Operations
VANCOUVER, CANADA - June 28, 2004 - LEADING BRANDS, INC. (NASDAQ: LBIX), North America's only fully integrated premium beverage company, announces its operating results, including record cash inflow from operations, for the first quarter of its 2004 fiscal year ended May 31, 2004.
During Q1 the Company generated cash inflow from operations of $1,061,000 US ($1,431,000 Cdn) versus $295,000 US ($424,000 Cdn) in the same quarter last year. Net income before taxes was $768,000 US ($1,035,000 Cdn) compared to $7,000 US ($10,000 Cdn) in 2003. The Company has recorded income tax expense of $371,000 US ($501,000 Cdn) in this quarter ($0 last year).
The income tax expense on operating income is a non-cash item in this period as the Company has tax loss carry-forwards sufficient to offset that expense. For the first time, the Company recorded stock-based compensation for employees. Total non-cash stock-based compensation expenses were $68,000 US ($92,000 Cdn). Resultant net income was $396,000 US ($534,000 Cdn), or $0.03 US ($0.04 Cdn) per share versus $7,000 ($10,000 Cdn) or $0.00 per share during Q1 2003.
Revenues for the quarter were $9,340,000 US ($12,595,000 Cdn) compared to $12,286,000 US ($17,686,000 Cdn) in Q1 2003. The reduction in revenue principally resulted from (1) the discontinuance of the Little Debbie's® snack cake distribution business, (2) change in mix of co-pack customers that supply raw materials, and (3) lower sales volumes in the United States.
Leading Brands Chairman and CEO Ralph McRae said: "We are very pleased with the turnaround in our operations. More than tripling operational cash inflow is no small task. We took very deliberate steps to accomplish that, which we related in our monthly newsletters. The reduction in revenues is directly attributable to the three items mentioned above. The re-focusing of our US business on our "IDS" model was completed during Q1 and we are now seeing the impact on both the top and bottom lines. Our results directly benefited from a rather dramatic 31% increase in gross profit percentage and a $706,000 US reduction in SG&A expenses."
The Company also announced the re-appointment of Iain Harris as a director. Mr. Harris' term expires at the Company's 2005 annual general meeting.
In reference to Mr. Harris' appointment, Mr. McRae said: "We are all fortunate to have Iain back on our Board. He has been a strong contributor to our Company for many years and brings a wealth of experience to our business."
In conjunction with this release, you are invited to listen to the Company's conference call, which will be held on Monday, June 28, 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:
We will continue to provide operational updates in our monthly newsletter on the first of most months, posted at www.LBIX.com.
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.