OREANDA-NEWS. Leading Brands, Inc. (NASDAQ:LBIX), North America’s only fully integrated healthy branded beverage company, announces results for its 2015 fiscal year, which ended February 29, 2016.  All financial amounts are denominated in Canadian dollars, with all financial figures rounded to the nearest $000 and, have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP).

The Company also announces that it has filed and is mailing a notice of meeting and management information circular (the “Information Circular”) to holders of common shares as of record on May 11, 2016 in connection with its AGM to be held in Vancouver, Canada on June 22, 2016 at 10:00 a.m. Pacific Time.  Shareholders are encouraged to read the Information Circular and vote today.  The board of directors of Leading Brands recommends that shareholders vote IN FAVOUR of all proposed resolutions.

Net loss for the 2015 Fiscal Year was $(1,303,000) or $(0.45) per share [$(0.45) fully diluted] versus a net income of $336,000 or $0.11 the prior year. Gross Revenue for the year slipped 16.9% to $11,513,000 from $13,862,000 as the company experienced lower demand and pricing for co-pack services. The Company has made significant corresponding changes to its cost structure and those initiatives are fully in effect for Q1 2016.

In particular, the 2015 loss included one-time costs of approximately $500,000, or $(0.17) per share, in relation to its 2015 annual meeting.  Additionally, the Company implemented costs savings over the course of 2015 that annualize to approximately $950,000, or $(0.33) per share that are fully in place for Q1 2016.

Leading Brands CEO, Ralph McRae, “We are now moving HappyWater® into the high volume convenience trade and are excited about the interest we have received from Asia for our easy to use and transport WaterBox™ format.”

Non-GAAP Net Income (Loss) before SBC is determined as follows:

  FY 2015 FY 2014
Net Income (Loss) $   (1,303,000 ) $  336,000  
Add back SBC   105,000     49,000  
Net income (Loss) before SBC $ (1,198,000 ) $ 385,000  

Non-GAAP Net Income per share before SBC is determined as follows:

  FY 2015 FY 2014
  Net Income (Loss) per share $  (0.45 ) $   0.11   
  Add back SBC per share   0.04      0.02  
  Net Income (Loss) per share
before SBC
$ (0.41 ) $ 0.13  

Pro-forma results for EBITDAS, as defined below, are determined as follows:

  FY 2015 FY 2014
Net Income (Loss) $   (1,303,000 ) $   336,000  
Add back:    
Interest, net   (5,000 )   (11,000 )
Depreciation and Amortization   705,000     724,000  
Non-cash stock based compensation   105,000     49,000  
Non-cash income tax expense   (437,000 )   109,000  
Total Add Backs   368,000     871,000  
EBITDAS $ (935,000 ) $ 1,207,000  

EBITDAS per share reconciles to earnings per share as follows:

  FY 2015 FY 2014
Net Income (Loss) per share $   (0.45 ) $   0.11  
Add back:    
Interest   0.00     0.00  
Depreciation and Amortization   0.24     0.25  
Non-cash stock based compensation   0.04     0.02  
Non-cash income tax expense (recovery)   (0.15 )   0.04  
EBITDAS per share $ (0.32 ) $ 0.42  

Gross profit margin for the fiscal year was 28.7%, a drop from 40.8% in the same period last year, again reflective of the pricing reduction provided to the Company’s principal co-pack customer as well as product mix. 

Discounts, rebates and slotting fees were $502,000 in 2015, up from $489,000 the prior year.  SG&A expenses dropped to $4,264,000 from $4,475,000 in the previous year. 

The Company paid $176,000 to repurchase 40,705 of its common shares at an average price of USD$3.28 per share during fiscal 2015.

As at February 29, 2016 the Company had free cash of $283,000.

As at February 29, 2016 the Company had outstanding 2,859,837 common shares.  The Company believes that its common share price remains significantly undervalued and will continue with the repurchase of its shares at appropriate times.