Canada: Big Rock Brewery Income Trust makes public to its holders first quarter 2006 results

Big Rock Brewery Income Trust reported to Unitholders its unaudited consolidated financial results for the three month period ended March 31, 2006, CCNMatthews confirmed May 11. These results reflect the consolidated operations of the Trust, Big Rock Brewery Ltd. and its wholly owned subsidiary Pine Creek Brewing Company Ltd.

Financial Highlights for the three month period ended March 31, 2006 compared with the same period for 2005 are as follows:

Net income for the quarter ending March 31, 2006 was $1,063,870 compared to $1,001,425 for the quarter ended March 31, 2005, a 6% increase due primarily to the increase in sales.

Net income per unit increased by 6% to $0.18 for the quarter ended March 31, 2006 compared to $0.17 in the same quarter last year. Units outstanding increased by 12,700 to 6,011,024 during the quarter.

Cash distributions declared to unitholders for the quarter ended March 31, 2006 were $1,982,967 or $0.33 per unit (2005 - $1,761,517 or $0.30 per unit).

Sales volume grew by 8% during the first quarter from 41,825 HL to 45,078 HL. These strong sale results are attributable to a rapid growth in Big Rock's private label and value beer business. Big Rock's premium products sales were relatively flat year over year.

In early March, selling prices were increased an average of 3% to mitigate increasing input costs particularly transportation and utilities. At the same time the selling prices of various Big Rock brands were harmonized.

For the quarter ended March 31, 2006, net sales revenue rose 5% to $8,319,702 from $7,948,540 in 2005. Year-over-year net revenue per hectoliter decreased by $5 reflecting the increase in sales of lower margin value and private label brands.

Cost of sales increased to $3,299,341 this quarter from $3,164,715 in the same quarter last year primarily due to the increase in production volumes. Year over year the cost of sales per hectoliter decreased by $3 per hectolitre from $76 to $73. Production efficiencies increase as Big Rock shifts its production to beer in cans vs bottles. As the first quarter is typically the slowest of the year, costs per hectoliter in the quarter are higher than the annual average of $71/HL.

Gross profit for the quarter was up $236,536 (5%) to $5,020,361 from $4,783,825 in the same quarter last year commensurate with the net sales increase.

Selling expenses for the quarter ended March 31, 2006 increased by $168,826 (7%) to $2,444,178 compared to $2,275,352 in the same quarter last year. This increase is entirely attributable to a non-resident brewer "cost of service" charge of $24/HL by the B.C. Liquor Distribution Branch. This is applicable as Big Rock no longer operates a B.C. brewery. Alberta and B.C are currently working on harmonizing the treatment of inter-provincial trade and commerce and Big Rock anticipates the same treatment in B.C. that B.C. brewers are accorded in Alberta.

Income tax expense for the quarter of $182,594 (2005 - $190,641) is comprised of $223,228 in current income tax expense less $40,634 in future income tax recovery. The income trust structure shelters approximately $5,586,894 of net income by shifting the tax burden to the unitholders and reducing the effective income tax rate from 34.55% to 14.55%.

Big Rock continues to enjoy good liquidity with $5,981,728 in cash and cash equivalents at quarter-end (December 31, 2005 - $5,722,465) after paying out cash distributions of $1,981,600 during the quarter ended March 31, 2006 (2005 - $1,759,437) and no long-term debt.

Cash provided by operating activities increased by $1,812,911 (185%) to $2,794,347 for the quarter ended March 31, 2006 from $981,436 in the same quarter last year. The increase arose primarily from decreases in accounts receivable and the future income tax provision.

Big Rock is a regional producer and marketer of premium quality beers, headquartered in Calgary, Alberta, Canada. Big Rock's products are available in draught, bottles and cans. The Company also produces or distributes cider and cooler products. Big Rock products are marketed in seven provinces and three territories in Canada.

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