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Leading Brands, Inc. Announces Q2 and YTD Results
Q2 Gross Revenue Growth 38% Net Income of $0.02 US per share, YTD Gross Revenue Growth 41% Net Income of $0.04 US per share
VANCOUVER, CANADA - September 28, 2006 - Leading Brands, Inc. (NASDAQ: LBIX), North America's only fully integrated premium beverage company, announces results for the second quarter of its 2006 fiscal year which ends February 28, 2007. All financial amounts denominated in US dollars.
Net income for the quarter was $320,000, or $0.02 per share, versus a net loss of $158,000 or $0.01 per share in Q2 of fiscal 2005. Gross revenue for the quarter was $15,740,000, versus $11,395,000 in Q2 of the prior year, an increase of $4,345,000. US dollar quarter over quarter gross revenue growth was 38%.
YTD net income was $585,000 or $0.04 per share, versus net income of $142,000 or $0.01 per share in the same period last year. YTD gross revenue was $28,975,000, versus $20,551,000 in the first half of last year, an increase of $8,424,000 or 41%, significantly greater than the 35% growth seen in the last half of fiscal 2005 or 0.03% in the same six month period last year.
Discounts, rebates and slotting fees rose from $493,000 in the second quarter of fiscal 2005 to $1,216,000 this past quarter, an increase of more than $700,000. These higher amounts were directly related to new slotting fees and promotions supporting the launch of, and expanding distribution for, TrueBlue® and the Company's other brands. Cash inflow from operations for the quarter was approximately $1,058,000, or $0.07 per share, before more than $198,000 in non-cash stock based compensation charges. YTD cash inflow from operations before stock based compensation expense was $1,856,000 or $0.12 per share.
Leading Brands Chairman and CEO Ralph McRae said: "We continue to see strong sales growth from our portfolio of premium beverage brands, which recently grew to include INFINITY® Health Water™. TrueBlue® has now made its way into more than 14,000 chain grocery stores across the United States and Canada and that total is growing every month. I believe that a key indicator of our progress is the cash generated by our operations, obviously before non-cash stock based compensation charges. It is a testament to our Integrated Distribution System that we are able to produce material cash flow while growing at this significant pace. That cash flow allows us to continue to invest behind all of our brands to achieve additional growth."
Mr. McRae continued: "I am also looking forward to our TrueBlue® marketing campaign gearing up in California next month. We are anxious to see what the impact of a broad-scale program such as this will have on our brand awareness and sales in a couple of the largest US markets. If it meets with the success we hope, our goal is to roll it out to other large North American cities."
In conjunction with this release, you are invited to listen to the Company's conference call, which will be held on Thursday, September 28, 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: 1-416-850-9143
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. Three months Three months Six months Six months
ending ending ending ending
August 31 August 31 August 31 August 31
2006 2005 2006 2005
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Gross sales $ 15,740,271 $ 11,395,415 $ 28,974,579 $ 20,551,158
Less: Discounts, rebates and slotting fees (1,216,479) (492,506) (2,343,890) (717,975)
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Net sales 14,523,792 10,902,909 26,630,689 19,833,183
Expenses
Cost of sales 10,089,042 7,807,807 18,621,527 13,699,886
Selling, general & administration expenses 3,445,297 2,773,595 6,221,616 4,987,082
Depreciation and amortization 230,242 232,110 456,058 460,643
Interest expense 130,084 83,120 255,851 161,814
Other expense - 410 - 153
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Total Expenses 13,894,665 10,897,042 25,555,052 19,309,578
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Net income before taxes 629,127 5,867 1,075,637 523,605
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Less: Income tax expense 309,214 163,968 490,881 381,270
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Net income (loss) after taxes 319,913 (158,101) 584,756 142,335
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Deficit, beginning of period (18,745,343) (17,434,322) (19,010,186) (17,734,758)
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Deficit, end of period ($18,425,430) ($17,592,423) ($18,425,430) ($17,592,423)
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EARNINGS (LOSS) PER SHARE
Basic $0.02 ($0.01) $0.04 $0.01
Diluted $0.02 ($0.01) $0.04 $0.01
Weighted average number of 15,467,590 15,058,439 15,290,956 15,051,754
shares outstanding
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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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