By: Dylan Sikes - AllPennyStocks.com News

Friday, April 18, 2014

Ah, good ol’ trustworthy beer. My love for you will never die. Those may be the words of the loveable cartoon character Homer Simpson, but they also ring true for millions of people on planet Earth. There are shows dedicated to beer and, as CBC noted in an article today, countless beer festivals around the world that are worthy of the travel time and expense to visit to try a new type of suds. People still love their Budweiser and other legacy beers, but craft brews and smaller beer makers have made their way mainstream, including now being added to the airline menus for in-flight offerings. In the U.S. last year, craft beer sales jumped 20 percent to $14.3 billion. The love of a cold one is showing up in the figures for Brick Brewing Co. Ltd. (TSX:BRB), the largest Canadian-owned brewery in Ontario. The Kitchener-based company offers a range of alcoholic beverages, including beers brewed through its Waterloo Brewing Co. division and vodka and malt-based coolers and crafted ciders produced under the Seagram brand that are sold coast-to-coast. Brick Brewing is the only craft brewer in Canada to be certified under the BRC Global Standard for Food Safety.

The company’s core beer styles – Pilsner, Dark Lager and Indian Pale Ale – brought home the gold, silver and bronze medals at the Ontario Brewing Awards held in Toronto on April 3.

On Thursday, Brick Brewing released its financial results for the fourth quarter and fiscal year ended January 31. Supported by the launch of new products and increased marketing efforts, the company posted record annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $4.6 million on net revenue of $37.7 million. That compares to EBITDA of $4.01 million on revenue of $35.3 million during the prior fiscal year.

Net income for the latest year was $525,199, or 2 cents per share, versus $351,033, or 1 cent per share, in the fiscal year ended January 31, 2013.

"We put up a great result in fiscal 2014. Our team was successful in growing revenues and volumes, especially in our premium Waterloo and Seagram brands. The growth in premium brands coupled with our continued focus on cost reductions allowed us to expand margins, overcome the impact of the beer tax correction and still post record EBITDA." said George Croft, President and CEO at Brick, in a statement yesterday.

Gross margin was up from 24.4 percent in fiscal 2013 to 26.1 percent in fiscal 2014.

Volume in the company’s Laker brand increased 4.5 percent across the year. Seagram brand volume improved 4.8 percent. The Waterloo brand saw a stellar 35.3-percent growth in volume.

In a bid to further maximize efficiency and cut costs, Brick said that it is divesting its land and building on King Street in Waterloo during this fiscal year. The proceeds will be invested in the Kitchener location.

The news did little for the value of a share of BRB, with the stock edging ahead only by a penny to $1.31 in Thursday action. Since hitting $1.93 last May, which was the highest point since September 2007, the stock has been sliding lower. However, a monthly chart shows the stock to be holding the 50 day moving average ever since touching it at $1.14 last October. With the improved operations and profits, the combination of technicals and fundamentals may support a move to put some distance between the price per share and the key moving average. Proper due diligence is, as always, encouraged.

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