Canada: Big Rock Brewery Income Trust announced sales volume dropped by 4% to 153,915 hl for the nine months ended September 30, 2006

Big Rock Brewery Income Trust reported November 09 to its Unitholders its unaudited consolidated financial results for the three and nine month periods ended September 30, 2006. 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 and nine month periods ended September 30, 2006 compared with the same periods for 2005 are as follows:

Net income for the quarter ending September 30, 2006 was $2.685.263 compared to $2.224.067 for the quarter ended September 30, 2005, a 21% increase due primarily to lower selling expenses, a future income tax recovery, and a reduction in federal excise tax. Year-to-date net income was $6.496.067 a 32% increase over the same period last year.

Net income per unit increased by 22% to $0.45 for the quarter ended September 30, 2006 compared to $0.37 in the same quarter last year. Year-to-date net income per unit was $1.08 up 30% from $0.83 for the same period last year.

Cash distributions declared to unitholders for the quarter ended September 30, 2006 were $1.990.056 or $0.33 per unit (2005 - $1.966.219 or $0.33 per unit). Year-to-date distributions were $5.957.970 or $0.99 per unit (2005 - $5.861.360 or $0.96 per unit).

For the three months ended September 30, 2006 sales volume was 52,860 HL, down 16% compared to sales volume of 62,740 HL for the same quarter last year. Decreased volumes are primarily a result of price increases in the value brand portfolio and a reduction of sales incentives on craft brands. For the nine months ended September 30, 2006 sales volume was 153,915 HL, down 4% from 160,820 HL during the same period last year. As previously discussed, Management's strategy this year emphasizes profitability over volume. Revenue per hectoliter during the quarter increased to $212 from $188 last year. This is partially due to an increase in Alberta volume as a percentage of total volume quarter over quarter as well as $407,765 in reduced excise duty on the first 37,500 HL of production effective July 1, 2006. For the quarter ended September 30, 2006, sales revenue decreased $553,297 (5%) to $11.222.738 from $11.776.035 for the same period of 2005. Year-to-date revenue decreased $458,422 (2%) to $30.097.447 from $30.555.869 for the same period last year. The reduction in sales revenue results from the decrease in volume mitigated by a reduction in federal excise tax.

Cost of sales decreased $459,919 (10%) to $3.968.922 this quarter from $4.428.841 in the same quarter last year in line with sales volume. Year-to-date cost of sales decreased by $374,837 (3%) to $11.214.519 ($73/HL) from $11.589.356 ($72/HL). Per hectoliter costs have increased due mainly to increases in packaging material costs.

Gross profit for the quarter was down $93,378 (1%) to $7.253.816 from $7.347.194 in the same quarter last year, relatively flat. Year-to-date gross profit decreased by $83,585 (less than 1%) to $18.882.928 (2005 - $18.966.513).

There was a significant decrease in selling and marketing expenses during the 3rd quarter compared to last year. Selling expenses decreased by $612,407 (18%) to $2.804.357 compared to $3.416.764 in the same quarter last year. Year-to-date selling expenses have decreased by $1.103.794 (12%) to $7.906.383 from $9.010.177. A reduction in point of sale giveaways and marketing/sales programs which resulted in lower sales volume has positively impacted selling expenditures resulting in an improved bottom line.

Increases in recruitment fees, severance pay, IT systems support, insurance and issuance of unit appreciation rights during the quarter resulted in an increase in general and administrative expenses of $200,835 (23%) to $1.089.685 during the quarter ending September 30, 2006 from $888,850 in the same quarter last year. Year-to-date general and administrative expenses increased by $18,490 to $2.807.845 from $2.789.355 in the same period last year.

The income tax provision for the quarter was a $148,665 compared to an expense of $288,680 in the same period last year, and is comprised of $351,533 in current income tax expense and $(202,868) in future income tax recovery. The future income tax recovery relates to a reduction in future federal and provincial income tax rates substantively enacted this year.

Big Rock's balance sheet gained strength again this quarter as total assets increased by $483,071 and Unitholders equity improved by $860,011 compared to June 30, 2006, after paying out cash distributions of $1.988.398. Big Rock's liquidity is excellent with $6.147.903 in cash and cash equivalents at quarter-end (December 31, 2005 - $5.722.465). Big Rock continues to hold no operating or long-term debt.

Big Rock completed and commissioned a 22,000 sq. ft. warehouse expansion during the quarter at a capital cost of $1.330.000. The additional space allows Big Rock to discontinue the use of third party warehouse storage thereby reducing costs and in-transit product damage and improving efficiencies.

Cash provided by operating activities increased by $394,451 (12%) to $3.568.959 for the quarter ended September 30, 2006 from $3.174.508 in the same quarter last year. Year-to-date cash flow from operations increased by $2.298.213 to $8.712.348 from $6.414.135 in the same period last year. The increase arose primarily from a decrease in accounts receivable and an increase in net income.

Subsequent to quarter-end the Honourable Jim Flaherty, Canadian Minister of Finance, proposed changes to the taxation of Canadian income trusts. The relevant measures announced include a proposed tax on distributions paid by publicly traded income trusts and limited partnerships, and will result in less after-tax cash being available for payment to all unitholders. As an existing income trust, it is important to note that these measures will not apply to Big Rock until January 2011. Under the Government's proposal the existing tax treatment of distributions will remain in effect during the four-year grace period to 2011. The Trust is currently considering the effects of the Government's proposal on its previously announced planned internal reorganization. Consequently Big Rock does not intend to proceed with a previously announced special meeting of unitholders to consider the implementation of the internal reorganization until all aspects of the Government's proposal are considered.

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