Leading Brands, Inc. Announces Q2 EPS $0.03 US vs. $0.02 US last
year VANCOUVER, Sept. 20 /PRNewswire-FirstCall/ -- 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.
During Q2 the Company generated net income of $512,000 US ($682,000
Cdn) or $0.03 US ($0.04 Cdn) per share versus $301,000 US ($414,000
Cdn) or $0.02 US ($0.03 Cdn) in the same quarter last year. Net
income before taxes for the quarter was $1,143,000 US ($1,521,000
Cdn) or $0.08 US ($0.10 Cdn) per share compared to a net loss
before taxes of $361,000 US ($497,000 Cdn) or $0.02 US ($0.03 Cdn)
in Q2 2003. The Company has recorded income tax expense of $631,000
US ($839,000 Cdn) in this quarter. The income tax expense is a non-
cash item in this period as the Company has tax loss carry-forwards
sufficient to offset that expense. In prior comparison periods the
Company was required to record income tax assets to reflect those
tax loss carry-forwards which correspondingly increased net income
by $662,000 in the same quarter of the prior year. The Company
recorded non-cash stock-based compensation expenses of $155,000 US
($206,000 Cdn) during Q2. Revenues for the quarter were $11,073,000
US ($14,738,000 Cdn) compared to $12,481,000 US ($17,178,000 Cdn)
in Q2 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 products sold
that include the Company supplying raw materials; and (3) lower
sales volumes in the United States due to the Company re-building
its sales efforts there. The Company also recorded other income of
$667,000 US ($887,000 Cdn) from the settlement of certain disputes
and resultant contract cancellations during the quarter. For the
first six months of its 2004 fiscal year ended February 28, 2005,
the Company reported net income of $909,000 US ($1,216,000 Cdn) or
$0.06 US ($0.08 Cdn) per share versus $308,000 US ($424,000 Cdn) or
$0.02 US ($0.03 Cdn) during the same period last year. Net income
before taxes year to date is $1,911,000 US ($2,556,000 Cdn) or
$0.13 US ($0.17 Cdn) per share compared to a net loss before taxes
of $354,000 US ($487,000 Cdn) or $0.02 US ($0.03 Cdn) for the first
half of fiscal 2003. Revenues for the period were $20,413,000 US
($27,333,000 Cdn) versus $24,767,000 US ($34,865,000 Cdn) a year
ago. Leading Brands Chairman and CEO Ralph McRae said: "If anyone
was looking for further evidence of our operational turnaround, I
believe they now have it. Given that we have had to record income
tax assets last year and a corresponding income tax expense this
year - all the while not paying any cash income taxes - makes the
before tax number more representative of the turn in the Company's
fortunes. We are very pleased to have been able to increase our
year to date net income before taxes by more than $3,000,000 Cdn.
Our team should be proud of what they accomplished." Mr. McRae
continued: "We have seen dramatic cost savings and margin
improvements in virtually all areas of our company, but most
significantly in our US sales division and bottling plants. Moving
forward, it is critical for us to maintain this focus on
profitability while expanding our business." In conjunction with
this release, you are invited to listen to the Company's conference
call, which will be held on Monday, September 20, 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: 1-416-641-6679 -------------- The Company will
continue to provide operational updates in its monthly newsletter
on the first of most months, posted at http://www.lbix.com/.
------------ CONTACT: Tel: (604) 685-5200, Email: 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 , Country Harvest Juices,
Caesar's Bloody Caesar Cocktails, Cool Canadian Water, Infinity(TM)
and Brand X Originals(TM). 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) LEADING BRANDS, INC. CONSOLIDATED STATEMENT OF INCOME
(LOSS) AND DEFICIT (UNAUDITED) (EXPRESSED IN CANADIAN DOLLARS)
Three months Three months Six months Six months ending ending
ending ending August 31 August 31 August 31 August 31 2004 2003
2004 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 ending ending
ending August 31 August 31 August 31 August 31 2004 2003 2004 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
-------------------------------------------------------------------------
DATASOURCE: Leading Brands, Inc. CONTACT: CONTACT: Tel: (604)
685-5200, Email:
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