Leading Brands, Inc. (Nasdaq:LBIX), North
America's only fully integrated healthy branded beverage company,
announces results for the second quarter of its 2010 fiscal year,
which ended August 31, 2010. All financial amounts are denominated
in Canadian dollars.
Q2 net income before stock based compensation (SBC) was $632,000
or $0.16 per share versus $876,000 or $0.22 per share in the same
quarter last year. Year to date net income before SBC was
$1,110,000 or $0.28 per share as compared to $1,151,000 or $0.28 in
the same period of fiscal 2009. Q2 net loss including SBC was
$549,000 or $0.14 per share versus a net income including SBC of
$809,000 or $0.20 per share in the same quarter of fiscal 2009.
As explained in our July 1, 2010 Q1 news release, the Company
vested certain stock options in order to dramatically reduce future
SBC expenses and eliminate the volatility caused by the variable
pricing formula mandated under GAAP using the Black Scholes model
on those options. Consequently, the Company recorded a onetime
SBC charge of $948,000 in Q2. Therefore, YTD net loss
including SBC was $141,000 or $0.04 per share as compared to a net
income including SBC of $1,012,000 or $0.25 last year.
Non-GAAP Income before SBC is determined as follows:
|
Q2
2010 |
Q2
2009 |
YTD
2010 |
YTD
2009 |
|
|
|
|
|
Net income (loss) |
($549,000) |
$809,000 |
($141,000) |
$1,012,000 |
|
|
|
|
|
Add back SBC |
1,181,000 |
67,000 |
1,251,000 |
139,000 |
|
|
|
|
|
Net income before SBC |
$ 632,000 |
$ 876,000 |
$1,110,000 |
$1,151,000 |
Non-GAAP earnings per share before SBC are determined as
follows:
|
Q2
2010 |
Q2
2009 |
YTD
2010 |
YTD
2009 |
Earnings (loss) per share |
$ (0.14) |
$ 0.20 |
$ (0.04) |
$ 0.25 |
|
|
|
|
|
Add back SBC per share |
0.30 |
0.02 |
0.32 |
0.03 |
|
|
|
|
|
Earnings per share before SBC |
$ 0.16 |
$ 0.22 |
$ 0.28 |
$ 0.28 |
The Company will, for at least the balance of this fiscal year,
report EBITDAS (earnings before interest, taxes, depreciation,
amortization and stock based compensation) as a measure of its
ability to generate cash and highlight this non-recurring, non-cash
expense.
Pro-forma results for non-GAAP EBITDAS are determined as
follows:
|
Q2 |
Q2 |
YTD |
YTD |
|
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
Net Income (Loss) |
($549,000) |
$ 809,000 |
($141,000) |
$1,012,000 |
|
|
|
|
|
Add back: |
|
|
|
|
Interest |
45,000 |
58,000 |
91,000 |
126,000 |
Depreciation and Amortization |
174,000 |
182,000 |
343,000 |
363,000 |
Non-cash stock based
compensation |
1,181,000 |
67,000 |
1,251,000 |
139,000 |
Non-cash income tax expense |
285,000 |
380,000 |
491,000 |
525,000 |
|
|
|
|
|
Total Add Backs |
1,685,000 |
687,000 |
2,176,000 |
1,153,000 |
|
|
|
|
|
EBITDAS |
$1,136,000 |
$1,496,000 |
$2,035,000 |
$2,165,000 |
|
|
|
|
|
Gross profit margin for the quarter was 49.1%, up from 48.7% in
the same quarter last year.
Gross revenue for Q2 was $6,291,000, versus $6,624,000 last
year, a decrease of 5.0%. The decline in revenues
is due to reduced sales of branded beverage products due
principally to the Company reducing focus on some markets and lower
co-pack volume due to a seasonal shift of some production into Q1.
YTD revenue decreased to $11,846,000 from $12,523,000 in
fiscal 2009. The Company ceased its food distribution business in
mid-Q1 of fiscal 2009.
Discounts, rebates and slotting fees were $424,000, down from
$511,000 in Q2 of the prior year. SG&A expenses were
$2,923,000, up 88.8% from $1,548,000 the previous year, primarily
due to the onetime SBC charge. The Company also recorded
non-cash income tax expense of $285,000 during the quarter.
As at quarter end, the Company had 3,908,586 shares outstanding
and cash and available credit totaling $4,084,000.
About Leading Brands, Inc.
Leading Brands, Inc. (Nasdaq:LBIX) is North America's only fully
integrated healthy beverage company. Leading Brands creates,
designs, bottles, distributes and markets its own proprietary
premium beverage brands such as TrueBlue® Blueberry Juice,
LiteBlue® Blueberry Juice, PureBlue®, PureRed®, PureBlack® and
PureWhite® SuperJuices, BabyBlue® childrens' superfruit blends and
Caesar's® Cocktails via its unique Integrated Distribution System
(IDS)™ which involves the Company finding the best and most
cost-effective route to market. The Company strives to use the
best natural ingredients hence its mantra: Better Ingredients –
Better Brands.
The Leading Brands, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=2681
Non-GAAP Measures
Any non-GAAP financial measures referenced in this release do
not have any standardized meaning prescribed by GAAP and are
therefore unlikely to be comparable to similar measures presented
by other issuers.
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. For all such forward-looking statements, we
claim the safe harbor for forward looking statements within the
meaning of the Private Securities Litigation Reform Act of
1995.
Better Ingredients | Better Brands™
©2010 Leading Brands, Inc.
This news release is available at
www.LBIX.com
LEADING BRANDS, INC. |
|
|
|
|
CONSOLIDATED STATEMENT OF INCOME
(LOSS) |
|
|
|
|
(UNAUDITED) |
|
|
|
|
(EXPRESSED IN CANADIAN
DOLLARS) |
|
|
|
|
|
|
|
|
|
|
Three months |
Three months |
Six months |
Six months |
|
ended |
ended |
ended |
ended |
|
August 31, 2010 |
August 31, 2009 |
August 31, 2010 |
August 31, 2009 |
|
|
|
|
|
Gross revenue |
$ 6,290,674 |
$ 6,624,201 |
$ 11,846,354 |
$ 12,522,980 |
Less: Discounts, rebates and slotting
fees |
(424,065) |
(511,284) |
(843,363) |
(1,001,000) |
Net revenue |
5,866,609 |
6,112,917 |
11,002,991 |
11,521,980 |
|
|
|
|
|
Expenses (Income) |
|
|
|
|
Cost of sales |
2,987,581 |
3,136,073 |
5,537,794 |
6,433,792 |
Selling, general and administration
expenses |
2,922,539 |
1,547,897 |
4,680,413 |
3,071,723 |
Depreciation and amortization |
173,702 |
182,125 |
343,435 |
362,898 |
Interest expense |
44,950 |
57,767 |
91,492 |
125,825 |
Other income |
(3,133) |
(1,018) |
(5,419) |
(1,198) |
Loss on sale of assets |
2,076 |
555 |
3,249 |
8,515 |
Foreign exchange loss (gain) |
2,473 |
550 |
2,067 |
(16,463) |
|
6,130,188 |
4,923,949 |
10,653,031 |
9,985,092 |
|
|
|
|
|
Net income (loss) before taxes |
(263,579) |
1,188,968 |
349,960 |
1,536,888 |
|
|
|
|
|
Income tax expense |
285,493 |
379,513 |
490,808 |
524,959 |
|
|
|
|
|
Net income (loss) |
($ 549,072) |
$ 809,455 |
($
140,848) |
$1,011,929 |
|
|
|
|
|
|
|
|
|
|
Income (loss) per share – basic and
diluted |
($ 0.14) |
$ 0.20 |
($ 0.04) |
$ 0.25 |
|
|
|
|
|
Weighted average number of shares outstanding
– basic and diluted |
3,922,477 |
3,991,625 |
3,922,876 |
3,991,625 |
CONTACT: Leading Brands, Inc.
(604) 685-5200
info@LBIX.com
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