USA: MBC Holding Company Announces Strong Second Quarter Results
Net sales for its second quarter ended June 30, 2000, were $8,508,739, an increase of 96.4% from net sales of $4,332,550 in the second quarter of 1999. For six month period ending on June 30, 2000 the Company had net sales of $13,943,239, which is an increase of 82.8% from net sales of $7,627,692 for the same period in 1999. The Company reported net income of $513,770 or $0.12 per share in the 2000 second quarter compared to net income of $131,410 or $0.04 per share for the same period in 1999. Net income for the six month period ending on June 30, 2000 was $588,408 or $.13 per share versus a net loss of $260,302 or ($.07) per share for the same period of the prior year.
"I am extremely pleased with the strength of our 2nd quarter numbers," said Jack Lee, Chief Executive Officer for MBC Holding Company. "We saw strong growth in export sales, expanded contract brewing operations and enhanced cost cutting measures that are the result of agreements with Gopher State Ethanol. The combination of these factors produced these results."
3 Months Ended June 30 Six Months Ended June 30
2000 1999 2000 1999
Net Sales $8,508,739 $4,332,550 $13,943,239 $7,627,692
Gross Profit 1,471,397 697,581 $ 2,172,663 $ 886,541
Income 623,516 148,304 $769,051 ($166,501)
(loss) 513,770 131,410 588,408 ($260,302)
per share $ .12 $ .04 $ .13 ($ .07)
Net sales increased for both the quarter and six-month period ending June 30, 2000 due to the addition of contract customers and a continuing increase in export sales. The increase in net income for the second quarter and the six month period is a result of several factors, including the increased utilization of bottling capacity, the continued cost cutting measures implemented by the Company and the sharing of costs pursuant to several agreements entered into with Gopher State Ethanol, LLC an unconsolidated subsidiary. Gopher State has constructed an ethanol facility, to produce ethanol, distilled grains and raw carbon dioxide ("CO2") gas. The Company has a 28% ownership interest in Gopher State Ethanol, which began initial production in May 2000.
CO2 Joint Venture
In 1999, the Company entered into an agreement with an unrelated third party, Messer Greisheim Industries, a Pennsylvania, industrial and specialty gas firm and established a joint venture entitled MG-CO2 St. Paul LLC to produce liquid carbon dioxide. The joint venture constructed a plant next to the brewing and ethanol facilities and has commenced production of CO2 that will be sold to various users of refined CO2 products. The Company is a fifty percent holder in the joint venture.
Issuance of Additional Warrants
The Company also announced that in connection with the commencement of operations of the ethanol facility and the completion of its financing, it has granted 500,000 warrants to purchase its common stock at $4.00 per share and 500,000 warrants to purchase its common stock at $5.00 per share to the investors who contributed $6.5 million to Gopher State Ethanol, LLC. Bruce Hendry, Chairman of the Board of MBC Holding Company received half of the warrants.
Statements included in this press release that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties that could cause actual results to differ materially. Among these risks and uncertainties are information included in this press release which can be identified by the use of forward-looking terminology such as "may," "will," "expect," "anticipate," "estimate," or "continue" or the negative thereof or other variations thereon or comparable terminology constitutes forward-looking information. The following important factors, among others, in some cases have affected and in the future could affect the Company's actual results and could cause the Company's actual financial performance to differ materially from that expressed in any forward-looking statement: (i) competition within the brewing industry resulting from the increased number of brewers and available beers, (ii) the Company's ability to continue to achieve and maintain contract brewing arrangements; (iii) the success of the Company's proprietary brands, including its reliance upon distributors, (iv) the Company's continued ability to sell products for export; (v) Gopher State's ability to successfully operate an ethanol facility, and (vi) the Company's ability through a joint venture to operate a liquid carbon dioxide plant.
The Company operates a full-scale brewery in Saint Paul, Minnesota producing its proprietary Grain Belt, Pig's Eye, Minnesota Brew, and Yellow Belly malt beverages and marketing these beverages through an independent distribution network, primarily in Minnesota. The Company produces beers under a number of brand names, including Grain Belt, Grain Belt Premium, Grain Belt Light, Grain Belt Premium Light, GBX Malt Liquor, Pig's Eye Pilsner, Pig's Eye Lean, Pig's Eye Ice, Pig's Eye Red, Pig's Eye Non-alcoholic, and Yellow Belly.
The Company's Common Stock is traded on the Nasdaq Small Cap Market under the symbol "MBRW.
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