Clearly Canadian Beverage Corporation (TSX:CLV) (OTCBB:CCBC) today reported financial results for its third fiscal quarter ended September 30, 2003. (All figures below and in the attached schedules are stated in U.S. dollars).
As previously announced (February 27, 2002), the Company’s wholly owned U.S. subsidiary, CC Beverage (U.S.) Corporation, sold certain of its business assets. This divestiture included the sale of its private label co-pack bottling business, Cascade Clear brand water business and related production assets (which sale was completed in February 2002). As a result of this divestiture, for reporting purposes, the results and financial position of the Company now reflect the results of the “continuing operations” for the nine months ended September 30, 2003.
Results of Continuing Operations for the third quarter of 2003:
Net loss from continuing operations for the three months ended September 30, 2003 was $(781,000) or $(0.12) per share on sales revenues of $3,849,000 compared to $(520,000) or $(0.08) per share on sales revenues of $5,889,000 for the same period in 2002.
Net loss from continuing operations for the nine months ended September 30, 2003 was $(2,086,000) or $(0.31) per share on sales revenues of $10,932,000 compared to $(815,000) or $(0.12) per share on sales revenues of $17,672,000 for the nine months ended September 30, 2002.
“While overall sales for the Company’s beverage lines were down on a year over year basis, the Company is encouraged that sales of its Clearly Canadian brand in particular are showing a positive change in those regions where we are now established with dedicated distributors. Even though we are seeing some positive results from these changes, the Company still requires additional working capital to establish sustained profitability and operations going forward. To assist us in our efforts, we have engaged the services of certain parties to identify and evaluate strategic partnerships in an effort to enhance the Company’s financial position,” said Douglas Mason, President and CEO of Clearly Canadian Beverage Corporation.
Selling, general and administrative expenses were $1,576,000 for the three months ended September 30, 2003 compared with $2,206,000 for the same period in 2002, representing a reduction in such expenses of 29%. Selling, general and administrative expenses were $4,808,000 for the nine months ending September 30, 2003 compared to $6,195,000 for the same period in 2002, representing a reduction in such expenses of 22%.
Mason added: “In the third quarter, we continued to further control SG&A, maintaining expenses in line with sales. In the fourth quarter, we will work closely with our distributor network to keep the focus on brand Clearly Canadian in an effort to maintain sales levels through the end of 2003. These efforts will be supported by regional sales programs, developed to drive case sales and promote consumer purchase in the last quarter of the year.”
Gross profit for the three months ended September 30, 2003 was $918,000 (24%) compared to $1,722,000 (29%) for the same period in 2002. Gross profit for the nine months ended September 30, 2003 was $3,022,000 (28%) compared to $5,602,000 (32%) for the nine months ended September 30, 2002. The decrease of the Company’s gross profit is primarily attributed to the write down of inventories related to required label changes and discontinued packaging in the quarter.
Based in Vancouver, B.C., Clearly Canadian markets premium alternative beverages and products, including Clearly Canadian(R) sparkling flavored water, Clearly Canadian O+2(R) and Tre Limone(R) which are distributed in the United States, Canada and various other countries. Clearly Canadian also holds the exclusive license to manufacture, distribute and sell certain Reebok beverage products in the United States, Canada and the Caribbean. Additional information on Clearly Canadian may be obtained on the world wide web at www.clearly.ca.
Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as “expects”, “intends”, “anticipates”, “likely”, “believes” and words of similar import also identify forward-looking statements. Forward-looking statements are based on current facts and analyses and include the Company’s analysis of its product distribution systems, and anticipated changes thereto, and the Company’s expectations regarding the effects of its restructuring efforts, and anticipated reductions in expenses associated therewith, and the Company’s anticipated product distribution changes and promotional and marketing activities and the potential benefits of such changes, efforts and activities on its results of operations in future periods. Actual results may differ materially from those currently anticipated due to a number of factors including, but not limited to, general economic conditions, changing beverage consumption trends of consumers, the Company’s ability to generate sufficient cash flows to support capital expansion plans and general operating activities, competition, pricing and availability of raw materials, the Company’s ability to maintain the current and future retail listings for its beverage products and to maintain favorable supply, production and distribution arrangements, laws and regulations and changes thereto that may affect the way the Company’s products are manufactured, distributed and sold and other factors beyond the reasonable control of the Company. Additional information on factors that may affect the business and financial results of the Company can be found in filings of the Company with the U.S. Securities and Exchange Commission and with the British Columbia and Ontario Securities Commissions.
CLEARLY CANADIAN BEVERAGE CORPORATION
Douglas L. Mason, President and C.E.O.
CLEARLY CANADIAN BEVERAGE CORPORATION is the registered holder of various trademarks, including CLEARLY CANADIAN(R). CLEARLY CANADIAN BEVERAGE CORPORATION, and its wholly owned subsidiaries, produce, distribute and market CLEARLY CANADIAN(R), CANADIAN O+2(R), TRE LIMONE(TM) and certain Reebok beverage products. Reebok is the registered trademark of Reebok International Ltd. and its affiliated companies.