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NEWS RELEASE

LEADING BRANDS, INC. ANNOUNCES

Q2 EPS $0.03 US vs. $0.02 US last year

Record Q2 and YTD Net Income Before Income Taxes
YTD $0.13 US vs. loss of ($0.02 US) last year


VANCOUVER, CANADA - September 20, 2004 - LEADING BRANDS, INC. (NASDAQ: LBIX), North America’s only fully integrated premium beverage company, announces its operating results, including record net income before taxes, for the second quarter of its 2004 fiscal year ended August 31, 2004 and the first half of this fiscal year.


LEADING BRANDS, INC.		
CONSOLIDATED STATEMENT OF INCOME (LOSS) AND DEFICIT
(Unaudited)		
(EXPRESSED IN CANADIAN DOLLARS)
                                                         Three months     Three months     Six months       Six months
                                                         ending August    ending August    ending August    ending August
                                                         31, 2004         31, 2003         31, 2004         31, 2003
---------------------------------------------------------------------------------------------------------------------
Sales                                                 $   14,737,556    $  17,178,255   $   27,332,917  $   34,864,642
Expenses (Income) 		
Cost of sales                                             10,271,357       12,950,913       18,804,446      26,286,851
Operations, selling, general 
& administration expenses                                  3,427,664        4,207,622        6,045,806       8,019,226
Depreciation and amortization                                305,329          391,399          607,504         805,764
Interest expense                                              99,464          125,282          203,642         240,099
Other income from settlements and sale of assets            (887,481)               -         (884,965)              -
                                                      ----------------------------------------------------------------
Total Expenses                                            13,216,333       17,675,216       24,776,433      35,351,940
                                                      ----------------------------------------------------------------
Net income (loss) before taxes                             1,521,223         (496,961)       2,556,484        (487,298)
Income tax - current                                               -                -             (405)              -           
Income tax - provision future income tax                    (839,233)          911,030      (1,339,590)        911,030
                                                       ---------------------------------------------------------------
Net Income                                                   681,990           414,069       1,216,489         423,732
                                                       ---------------------------------------------------------------
Deficit, beginning of period, as previously reported     (26,318,594)     (23,203,201)     (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   (26,318,594)     (23,203,201)     (26,853,093)    (23,212,864)
                                                        ---------------------------------------------------------------
Deficit, end of period                                 ($ 25,636,604)   ($ 22,789,132)   ($ 25,636,604)  ($ 22,789,132)
                                                        ---------------------------------------------------------------		
EARNINGS PER SHARE		
   Basic                                                      $ 0.04           $ 0.03           $ 0.08          $ 0.03
   Fully diluted                                              $ 0.04           $ 0.03           $ 0.08          $ 0.03
Weighted average number of shares outstanding             15,040,169       14,962,955       15,040,169      14,861,053
-----------------------------------------------------------------------------------------------------------------------
LEADING BRANDS, INC.		
CONSOLIDATED STATEMENT OF INCOME (LOSS) AND DEFICIT
(Unaudited)		
(EXPRESSED IN UNITED STATES DOLLARS)
                                                         Three months     Three months     Six months       Six months
                                                         ending August    ending August    ending August    ending August
                                                         31, 2004         31, 2003         31, 2004         31, 2003
---------------------------------------------------------------------------------------------------------------------
Sales                                                 $   11,073,376    $  12,481,475   $   20,412,958  $   24,767,102
Expenses (Income) 		
Cost of sales                                              7,717,602        9,409,949       14,044,971      18,673,591
Operations, selling, general 
& administration expenses                                  2,575,448        3,057,198        4,516,826       5,704,881
Depreciation and amortization                                229,416          284,385          453,481         572,219
Interest expense                                              74,734           91,028          151,982         170,784
Other income from settlements and sale of assets            (666,828)               -         (664,962)              -
                                                      ----------------------------------------------------------------
Total Expenses                                             9,930,372       12,842,560       18,502,298      25,121,475
                                                      ----------------------------------------------------------------
Net income (loss) before taxes                             1,143,004         (361,085)       1,910,660        (354,373)
Income tax - current                                               -                -             (300)              -           
Income tax - provision future income tax                    (630,575)          661,942      (1,001,595)        661,942
                                                       ---------------------------------------------------------------
Net Income                                                   512,429           300,857         908,765         307,569
                                                       ---------------------------------------------------------------
Deficit, beginning of period, as previously reported     (17,964,065)      (15,669,849)    (17,524,051)    (15,676,561)
Adjustment for change in accounting for  stock-based 
 compensation                                                     -                  -        (836,350)              -
Accumulated deficit, beginning of period,  as restated   (17,964,065)     (15,669,849)     (18,360,401)    (15,676,561)
                                                        ---------------------------------------------------------------
Deficit, end of period                                 ($ 17,451,636)   ($ 15,368,992)   ($ 17,451,636)  ($ 15,368,992)
                                                        ---------------------------------------------------------------		
EARNINGS PER SHARE		
   Basic                                                      $ 0.03           $ 0.02           $ 0.06          $ 0.02
   Fully diluted                                              $ 0.03           $ 0.02           $ 0.06          $ 0.02
Weighted average number of shares outstanding             15,040,169       14,962,955       15,040,169      14,861,053
-----------------------------------------------------------------------------------------------------------------------

 

 

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