Q2 Net Income $592,000 or $0.19 per share ($0.17 fully diluted)
YTD Net Income $1,004,000 or $0.32 per share ($0.30 fully diluted)
Q2 EBITDAS $1,031,000 or $0.34 per share ($0.30 fully diluted)
YTD EBITDAS $1,828,000 or $0.59 per share ($0.54 fully diluted)
VANCOUVER, British Columbia, Sept. 28, 2012 (GLOBE NEWSWIRE) -- Leading Brands, Inc. (Nasdaq:LBIX), North America's only fully integrated healthy branded beverage company, announces results for its second quarter and first half of fiscal 2012, which ended August 31, 2012. All financial amounts are denominated in Canadian dollars, with all financial figures rounded to the nearest $000.
Q2 2012 net income was $592,000 or $0.19 per share ($0.17 fully diluted) versus net income of $646,000 or ($0.19) per share in the same quarter of fiscal 2011. YTD net income was 1,004,000 or $0.32 per share ($0.30 fully diluted), versus net income of 1,094,000 or $0.31 in the first half of last year.
Q2 2012 net income before stock based compensation (SBC) was $636,000 or $0.21 per share ($0.19 fully diluted) versus $710,000 or $0.21 per share in the same quarter last year. YTD net income before SBC was $1,094,000 or $0.35 per share ($0.33 fully diluted) down from $1,327,000 or $0.38 ($0.36 fully diluted) a year ago.
Q2 2012 EBITDAS (Earnings Before Interest, Depreciation, Amortization and SBC) was $1,031,000 or $0.34 per share ($0.30 fully diluted), versus $1,202,000 or $0.0.35 per share during the same period last year. YTD EBITDAS decreased to $1,828,000 or $0.59 per share ($0.54 fully diluted) from $2,233,000 or $0.64 per share ($0.61 fully diluted) in the first half of fiscal 2011.
The reductions in net income, net income before SBC and EBITDAS were due to increased product development costs, both in Q2 and YTD, and costs incurred test marketing a new brand.
| Non-GAAP Net Income before SBC is determined as follows: | ||||
|
Q2 2012 |
Q2 2011 |
YTD 2012 |
YTD 2011 |
|
| Net Income | $592,000 | $646,000 | $1,004,000 | $1,094,000 |
| Add back SBC | 44,000 | 64,000 | 90,000 | 233,000 |
| Net income before SBC | $636,000 | $710,000 | $1,094,000 | $1,327,000 |
| Non-GAAP Net Income per share before SBC is determined as follows: | ||||
|
Q2 2012 |
Q2 2011 |
YTD 2012 |
YTD 2011 |
|
| Net Income per share | $0.19 | $0.19 | $0.32 | $0.31 |
| Add back SBC per share | 0.02 | 0.02 | 0.03 | 0.07 |
| Net Income per share before SBC | $0.21 | $0.21 | $0.35 | $0.38 |
|
Pro-forma results for EBITDAS, as defined below, are determined as follows: |
||||
| Q2 | Q2 | YTD | YTD | |
| 2012 | 2011 | 2012 | 2011 | |
| Net Income | $592,000 | $646,000 | $1,004,000 | $1,094,000 |
| Add back: | ||||
| Interest | 5,000 | 24,000 | 7,000 | 50,000 |
| Depreciation and Amortization | 163,000 | 169,000 | 322,000 | 335,000 |
| Non-cash stock based compensation | 44,000 | 64,000 | 90,000 | 233,000 |
| Non-cash income tax expense | 227,000 | 299,000 | 405,000 | 521,000 |
| Total Add Backs | 439,000 | 556,000 | 824,000 | 1,139,000 |
| EBITDAS | $1,031,000 | $1,202,000 | $1,828,000 | $2,233,000 |
|
EBITDAS per share reconciles to earnings per share as follows: |
||||
|
Q2 2012 |
Q2 2011 |
YTD 2012 |
YTD 2011 |
|
| Net Income per share | $0.19 | $0.19 | $0.32 | $0.31 |
| Add back: | ||||
| Interest | 0.00 | 0.01 | 0.01 | 0.01 |
| Depreciation and Amortization | 0.06 | 0.04 | 0.10 | 0.10 |
| Non-cash stock based compensation | 0.01 | 0.02 | 0.03 | 0.07 |
| Non-cash income tax expense | 0.08 | 0.09 | 0.13 | 0.15 |
|
EBITDAS per share |
$0.34 | $0.35 | $0.59 | $0.64 |
Gross profit margin for the quarter was 41.9%, down slightly from 42.4% in the same quarter last year.
Gross revenue for Q2 2012 was $5,695,000, versus $5,729,000 in the comparative period of last year. The decline in revenues was principally due to the transition of certain brands into new package sizes and configurations that took time to implement.
Discounts, rebates and slotting fees were $277,000 in Q2 2012, roughly equal to $258,000 in Q2 of the prior year. SG&A expenses increased by $186,000 to $1,267,000 in Q2 of fiscal 2012 due to certain brand development costs and test marketing of a new brand.
As at August 31, 2012 the Company had free cash of $853,000.
During Q2 2012 the Company repurchased an additional 283,420 shares of its common stock at an average price, before offering costs, of $4.11 US per share, pursuant to both its Dutch Auction share buyback and its share repurchase program. As at August 31, 2012 the Company had outstanding 2,962,348 common shares. The Company believes that its common share price remains undervalued and will continue with its share repurchase program which now has approximately $488,000 US remaining authorized under it.
The repurchase program will continue concurrent with this announcement and expire upon the expenditure of the committed amount. It is subject to applicable laws, the insider-trading windows imposed by the Company's trading policy and may be suspended or terminated at any time by the Company's Board, without prior notice. Under the program, the Company may, but is not required to, purchase its shares from time to time through open market or privately negotiated transactions, as market and business conditions permit. Any repurchased shares will be returned to authorized but unissued shares of its common stock.
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 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.
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.
EBITDAS is a non-GAAP financial measure. EBITDAS is defined as net income (loss) before income taxes, interest expense, depreciation and amortization and stock-based compensation. EBITDAS should not be construed as a substitute for net income (as determined in accordance with GAAP) for the purpose of analyzing operating performance, as EBITDAS is not defined by GAAP. However, the Company regards EBITDAS as a complement to net income and income before taxes.
The Leading Brands, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2681
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™
©2012 Leading Brands, Inc.
This news release is available at www.LBIX.com
(table follows)
| LEADING BRANDS, INC. | ||||
| CONSOLIDATED STATEMENT OF INCOME | ||||
| (UNAUDITED) | ||||
| (EXPRESSED IN CANADIAN DOLLARS) | ||||
| Three months | Three months | Six months | Six months | |
| ended | ended | ended | ended | |
|
August 31, 2012 |
August 31, 2011 |
August 31, 2012 |
August 31, 2011 |
|
| Gross revenue | $5,695,178 | $ 5,729,388 | $10,635,116 | $11,074,857 |
| Less: Discounts, rebates and slotting fees | (277,090) | (258,653) | (552,917) | (598,195) |
| Net revenue | 5,418,088 | 5,470,735 | 10,082,199 | 10,476,662 |
| Expenses (Income) | ||||
| Cost of sales | 3,148,264 | 3,152,457 | 5,935,303 | 6,139,306 |
| Selling, general and administration expenses | 1,267,114 | 1,081,338 | 2,348,595 | 2,288,902 |
| Depreciation of property, plant and equipment | 163,243 | 168,463 | 321,741 | 335,643 |
| Change in fair value of derivative liability | 23,310 | 98,685 | 41,312 | 43,865 |
| Interest expense | 4,909 | 27,145 | 10,152 | 56,295 |
| Interest income | (271) | (2,863) | (2,907) | (6,726) |
| Loss on disposal of assets | 0 | 903 | 18,140 | 9,622 |
| Foreign exchange loss (gain) | (7,926) | (728) | 551 | (5,172) |
| 4,598,643 | 4,525,400 | 8,672,887 | 8,861,735 | |
| Income before income taxes | 819,445 | 945,335 | 1,409,312 | 1,614,927 |
| Income tax expense | 226,966 | 299,346 | 405,356 | 520,877 |
| Net income | $592,479 | $645,989 | $1,003,956 | $1,094,050 |
| Basic income per share | $0.19 | $0.19 | $0.32 | $0.31 |
| Weighted average number of shares outstanding – basic | 3,051,827 | 3,397,058 | 3,108,936 | 3,505,549 |
| Diluted income per share | $0.17 | $0.18 | $0.30 | $0.30 |
| Weighted average number of shares outstanding – diluted | 3,412,097 | 3,582,737 | 3,357,197 | 3,691,229 |