Leading Brands, Inc. Announces Suspension of Home Delivery Service to add Approximately $0.06 US to Fiscal 2003-04 Earnings.
Company will Take Non-Cash Charge of Approx. $6,500,000 US in Q4 2002 - 03
VANCOUVER, CANADA - February 10, 2003 - LEADING BRANDS, INC. LBIX (TSX:LBI), Canada's largest independent, fully integrated premium beverage company, , announces that its Quick Home Delivery subsidiary has determined to suspend home delivery service in the Greater Vancouver area after February 28, 2003. The date coincides with the end of the initial term of the company’s agreement to manage the service.
This move will add approximately $0.06 US per share to Leading Brands’ earnings next year. The Company will recognize a non-cash charge of approximately $6,500,000 against its long term investment in the fourth quarter of its 2002 fiscal year ended February 28, 2003 to reflect the event.
Leading Brands Chairman & CEO Ralph McRae said: “This was a difficult decision. Quick was able to meet or exceed every significant operational milestone. However, the business has reached a level where, in order to continue its growth, we needed to start expending material sums on marketing. That would have cut into Leading Brands’ consolidated earnings in fiscal 2003. With financial markets focused on profit growth, we made the tough decision between investing to grow Quick for the future and enhancing Leading Brands’ profitability now. Operationally, this step will further allow us to concentrate on building our beverage brands, both here and abroad.”
Mr. McRae continued: “Although we believe it prudent to take a charge on our investment in Quick in Q4 of our present fiscal year, we have managed to build some very efficient and effective technology that we will apply to further enhance efficiencies in our wholesale operations.”
Gerry Kenyon, President of Quick Home Delivery added: “Although we are disappointed with this decision, we are proud of what we have been able to accomplish at Quick. We at the same time want to apologize to our many home delivery customers who have come to rely on the service and thank them for their support. We will strive to provide the same high level of service through to our last day of deliveries on Friday, February 28.”
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.