VANCOUVER, CANADA, June 17, 2003, LEADING BRANDS, INC. (NASDAQ: LBIX), North America’s only fully integrated premium beverage company, announces results for its 2002 fiscal year ended February 28, 2003.
Revenue for the year rose 15% to $73,808,000Cdn ($47,362,000US) from $64,371,000Cdn ($41,182,000US) the prior year. Net income was $427,000Cdn ($274,000US) before non-cash write-downs associated with the discontinuation of the Company’s Quick Home Delivery service. Those write-downs were of $10,167,000Cdn ($6,524,000US), resulting in a loss per share of $0.71Cdn ($0.46US). Net income in the 2001 fiscal year was $2,093,000Cdn ($1,339,000US) or $0.15Cdn ($0.10US).
Leading Brands Chairman and CEO Ralph McRae said: “Fiscal 2002 saw both the most exciting and difficult decisions in our Company’s short history. The most exciting was our July 2002 expansion into the United States, which increased almost seven fold our penetrable market size. The most difficult was our decision to suspend operations at Quick.”
“During 2002, our operating results were burdened both by the costs of supporting the Quick operation and the startup of our US distribution. Both of those factors should be either eliminated or reduced this year.”
“From a standing start in July 2002 we have built a network of 90 distributors directly serving the majority of the US. We are continuing to build distribution of our TREK® Optimized Performance BeverageT throughout the US and Canada. Our Pez® 100% JuiceT brand is now in more than 7,000 convenience stores nationally and in July will start testing in several Wal-Mart®, Sam’s Club® and K-Mart® stores. During its introductory month in the 7-Eleven chain, our new Mad CrocT energy drink rocketed to number three in that trend-setting chain’s energy category. We have also shipped our first loads of Caesar’s Bloody Caesar® cocktail mixes to the US and Mexico.”
“Colder and wetter weather prevailed in much of the Northeast US during our fourth quarter of 2002 and into Q1, 2003. That negatively impacts our sales. During the same period we installed and commissioned new production lines, modified existing lines and added new bottling customers. Those installation and commissioning processes, although initially costly, are necessary to support future growth.”
“Finally, through Q4 of 2002 the Canadian/US dollar exchange rate deteriorated sharply. As we purchase many of our raw materials and ingredients in US dollars for re-sale in Canadian dollars that exchange move impacted our margins. Conversely, early in Q1 of 2003 that exchange rate reversed markedly in our favor. In general, we are pleased that the bulk of our one time, clean up items were dealt with in 2002, and look forward to a year of strong growth in 2003.”