Leading Brands, Inc. announces Q1 results Record Cash Inflow from
Operations VANCOUVER, June 28 /PRNewswire-FirstCall/ -- LEADING
BRANDS, INC. (NASDAQ: LBIX), North America's only fully integrated
premium beverage company, announces its operating results,
including record cash inflow from operations, for the first quarter
of its 2004 fiscal year ended May 31, 2004. 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(R)
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 http://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)(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 TREK(R), Soy2O(TM), Pez(R) 100%
Juices(TM), Country Harvest(R) Juices, Caesar's(R) Bloody Caesar
Cocktails, and Cool Canadian(R) 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. 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. We Build Brands(TM) (C)2004 Leading Brands,
Inc. This news release is available at http://www.lbix.com/ (tables
follow) CONTACT: Ralph D. McRae Chairman and CEO Leading Brands,
Inc. Tel: (604) 685-5200 ext. 238 Email: LEADING BRANDS, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (EXPRESSED IN UNITED
STATES DOLLARS) May 31 May 31 2004 2003
-------------------------------------------------------------------------
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 - -----------------------------
Total Expenses 8,571,926 12,278,914 -----------------------------
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
-------------------------------------------------------------------------
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
-------------------------------------------------------------------------
DATASOURCE: Leading Brands, Inc. CONTACT: Ralph D. McRae, Chairman
and CEO, Leading Brands, Inc., Tel: (604) 685-5200 ext. 238, Email:
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