Leading Brands, Inc. announces Q1 2005 financial results Net Income
of $0.02 US per share VANCOUVER, June 27 /PRNewswire-FirstCall/ --
LEADING BRANDS, INC. (NASDAQ:LBIX), North America's only fully
integrated premium beverage company, announces results for the
first quarter of its 2005 fiscal year, ended May 31, 2005. Net
Income was $300,000 US ($371,000 Cdn) or $0.02 US ($0.02 Cdn) per
share, versus net income of $396,000 US ($534,000 Cdn) or $0.03 US
($0.04 Cdn) per share in Q1 of 2004. Gross revenue for the quarter
was $9,156,000 US ($11,313,000 Cdn) compared to $9,383,000 US
($12,654,000 Cdn) in the same period last year. The comparable
decrease in revenue was attributable to lower co-pack revenue in
the Company's plants during April and May 2005. This was caused by
cooler and wetter than usual weather in Western Canada this spring
and the discontinuance of certain co-pack agreements referenced
previously. The Company correspondingly experienced substantial
growth in its distribution business with overall double-digit
increases in sales of its branded and licensed products. Leading
Brands Chairman and CEO Ralph McRae said: "Q1 is usually dominated
by our plants and results in Q2 are normally dictated by our
distribution business. So far, that pattern has repeated itself
this year. Our co-pack customers sell primarily in Western Canada,
where inclement spring weather was a factor in dampening volumes
this quarter. On the other hand, our distribution business is
spread across North America and consequently local weather
conditions usually average out. Although we are seeing significant
increases in our branded sales, they were not - partially due to
the season - sufficient to overtake the decline in plant volume. We
have every indication that will not be an issue in Q2." Mr. McRae
continued: "We are seeing rather extraordinary growth in the US,
with TrueBlue(R) leading the way. Monthly year over year sales
growth averaged 250% in the US this past quarter. That increase was
driven both by new chain store listings and repeat sales growth."
Mr. McRae concluded: "When analyzing our financial results it would
be an over-simplification to say that our net income fell $100,000
because our promotional expenditures grew by a like amount.
Although we have materially increased sales and marketing expenses
to support our brand rollouts, the fact is that each dollar of
co-pack revenue generates a higher percentage gross profit for us
than branded sales because the former carries little in the way of
raw materials cost. That impacts us most in Q1. Continuing sales
growth should more than make up for that first quarter impact in
due course." In conjunction with this release, you are invited to
listen to the Company's conference call, which will be held on
Monday, June 27, 2005, 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:
1-416-641-6675 -------------- 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)(TM) 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(R) Blueberry Cocktail, TREK(R),
Soy2O(TM), Pez(R) 100% Juices(TM), Country Harvest(R) Juices,
Caesar's(R) Bloody Caesar Cocktails, Brand X Originals(TM),
Infinity(TM) Sparkling Mountain Spring Water and Cool Canadian(R)
Mountain Spring Water. Safe Harbor. The Company relies upon the
Safe Harbor Laws of 1933, 1934, and 1995 for all public 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. The words
"believe", "intend", "expect", "anticipate", "project", "estimate",
"predict" and similar expressions are also intended to identify
forward-looking statements. 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 announcements.
Reliance should not be placed on these forward-looking statements,
which reflect the views of our directors and management as at the
date of this report only. We undertake no obligation to publicly
revise these forward- looking statements to reflect events or
circumstances that arise after publication. We Build Brands(TM)
(C)2005 Leading Brands, Inc. This news release is available at
http://www.lbix.com/ CONTACT: Tel: (604) 685-5200 Email: LEADING
BRANDS, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(EXPRESSED IN UNITED STATES DOLLARS) May 31 May 31 2005 2004
-------------------------------------------------------------------------
Gross sales $ 9,155,742 $ 9,382,702 Less: Discounts, allowances and
rebates (178,908) (97,671) --------------------------- Net sales
8,976,834 9,285,031 Expenses (Income) Cost of sales 5,892,078
6,302,098 Selling, general & administration expenses 2,260,047
1,912,098 Depreciation and amortization 228,532 224,065 Interest
expense 78,696 77,248 Other expense (income) (257) 1,866
--------------------------- Total Expenses 8,459,096 8,517,375
--------------------------- Net income before taxes 517,738 767,656
Income tax - provision future income tax (217,302) (371,320)
--------------------------- Net Income after income taxes 300,436
396,336 --------------------------- Deficit, beginning of period,
as previously reported (17,734,758) (17,524,051) Adjustment for
change in accounting for stock-based compensation - (836,350)
--------------------------- Accumulated deficit, beginning of
period, as restated (17,734,758) (18,360,401)
--------------------------- Deficit, end of period (17,434,322)
(17,964,065) --------------------------- EARNINGS PER SHARE Basic $
0.02 $ 0.03 Diluted $ 0.02 $ 0.03 Weighted average number of shares
outstanding 15,045,069 15,040,169
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LEADING BRANDS, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS) May 31 May 31 2005 2004
-------------------------------------------------------------------------
Gross sales $ 11,312,835 $ 12,653,512 Less: Discounts, allowances
and rebates (221,058) (131,719) --------------------------- Net
sales 11,091,777 12,521,793 Expenses (Income) Cost of sales
7,280,252 8,499,009 Selling, general & administration expenses
2,792,515 2,578,655 Depreciation and amortization 282,375 302,175
Interest expense 97,235 104,176 Other expense (income) (317) 2,517
--------------------------- Total Expenses 10,452,060 11,486,532
--------------------------- Net income before taxes 639,717
1,035,261 Income tax - provision future income tax (268,498)
(500,762) --------------------------- Net Income after income taxes
371,219 534,499 --------------------------- Deficit, beginning of
period, as previously reported (26,046,765) (25,735,980) Adjustment
for change in accounting for stock-based compensation - (1,117,113)
--------------------------- Accumulated deficit, beginning of
period, as restated (26,046,765) (26,853,093)
--------------------------- Deficit, end of period (25,675,546)
(26,318,594) --------------------------- EARNINGS PER SHARE Basic $
0.02 $ 0.04 Diluted $ 0.02 $ 0.04 Weighted average number of shares
outstanding 15,045,069 15,040,169
-------------------------------------------------------------------------
DATASOURCE: Leading Brands, Inc. CONTACT: Leading Brands, Inc.,
Tel: (604) 685-5200, Email:
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