| Ralph D. McRae, Chairman and CEO Leading Brands, Inc. (604) 685-5200 ext. 238 [email protected] |
|
NEWS
RELEASE
LEADING BRANDS, INC. ANNOUNCES Q1 RESULTS
Record Cash Inflow from Operations
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:
1�416-620-5690
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 product development, manufacturing, distribution, sales, marketing and licensing. In addition, Leading Brands produces their own line of beverages such as TREK™, Pez® 100% Juices™, Soy2O™ Country Harvest® Juices, Caesar's® Bloody Caesar Cocktail, and Cool Canadian® Water.
Disclaimer: The Company relies upon the Safe Harbor Laws of 1933, 1934, and 1995 for all public news releases, newsletters and other statements. Statements, which are not historical facts, are forward-looking statements. The Company, through its management, makes forward-looking public statements concerning its expected future operations, performance and other developments. Such forward-looking statements are necessarily estimates reflecting the Company's best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that other factors will not affect the accuracy of such forward-looking statements. It is impossible to identify all such factors. Factors which could cause actual results to differ materially from those estimated by the Company include, but are not limited to, 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 factors which may be identified from time to time in the Company's public announcement.
We Build Brands™
©2004 Leading Brands, Inc.
(tables follow)
LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(EXPRESSED IN UNITED STATES DOLLARS)
May 31 May 31
2004 2003
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Sales $ 9,339,582 $ 12,285,626
Expenses
Cost of sales 6,327,369 9,263,642
Selling, general & administration expenses 1,941,378 2,647,682
Depreciation and amortization 224,065 287,834
Interest expense 77,248 79,756
Other 1,866 -
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Total Expenses 8,571,926 12,278,914
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Net income before taxes 767,656 6,712
Income taxes (371,320) -
-------------------------------
Net Income 396,336 6,712
-------------------------------
Deficit, beginning of period, as previously reported (17,524,051) (15,676,561)
Adjustment for change in accounting for stock-based
compensation (836,350) -
Accumulated deficit, beginning of period, as restated (18,360,401) (15,676,561)
-------------------------------
Deficit, end of period $ (17,964,065) $ (15,669,849)
-------------------------------
EARNINGS PER SHARE
Basic $ 0.03 $ 0.00
Fully diluted $ 0.03 $ 0.00
Weighted average number of shares outstanding 15,040,169 14,759,151
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LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)
May 31 May 31
2004 2003
-------------------------------------------------------------------------------------
Sales $ 12,595,361 $ 17,686,387
Expenses
Cost of sales 8,533,090 13,335,938
Selling, general & administration expenses 2,618,142 3,811,603
Depreciation and amortization 302,175 414,366
Interest expense 104,176 114,817
Other 2,517 -
-------------------------------
Total Expenses 11,560,100 17,676,724
-------------------------------
Net income before taxes 1,035,261 9,663
Income taxes (500,762) -
-------------------------------
Net Income 534,499 9,663
-------------------------------
Deficit, beginning of period, as previously reported (25,735,980) (23,212,864)
Adjustment for change in accounting for stock-based
compensation (1,117,113) -
Accumulated deficit, beginning of period, as restated (26,853,093) (23,212,864)
-------------------------------
Deficit, end of period $ (26,318,594) $ (23,203,201)
-------------------------------
EARNINGS PER SHARE
Basic $ 0.04 $ 0.00
Fully diluted $ 0.04 $ 0.00
Weighted average number of shares outstanding 15,040,169 14,759,151
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