Hill Street Reports FY2019 Year End Results & Provides Update on Operations
Toronto, Ontario--(Newsfile Corp. - October 29, 2019) - Hill Street Beverage Company Inc. (TSXV: BEER) ("Hill Street" or the "Company") reported its fiscal 2019 financial results for the twelve-month period ended June 30, 2018. A complete set of financial statements and Management's Discussion & Analysis has been filed at www.sedar.com. All dollar figures are quoted in Canadian dollars.
FY2019 Year End Financial Highlights
- Gross revenue of $2.432 million, up 61% y/y;
- Gross profit of $0.432 million up 400% y/y;
- Gross profit of 18% of gross revenue up from 6% year ago;
- Net loss of $5.944 million, including the following one-time and non cash charges:
- $0.918 million charge for the public company listing;
- $0.826 million for Stock based compensation; and
- $.869 million in professional fees
- Working capital of $1.880 million, compared with $1.455 million for same period last year;
- End of quarter cash position of $1.068 million, with no debt.
"With cannabis edibles legal earlier this month in Canada, Hill Street continues to grow its brand awareness and consumer offtake in the alcohol free beverage segment," said Terry Donnelly, CEO of Hill Street. "All of the alcohol free revenue earned during the year came from growing our retail and distribution channels. Operational improvements made in FY18 began to show the results we anticipated. Going forward to address the cannabis-infused edibles market, we are evaluating companies third-party bottling and canning companies that have facilities designed and licensed to produce cannabis beverages remain. We are confident that Hill Street's alcohol free and cannabis infused business model will materialize as expected over the next 12 months."
|Results for the Year Ended||June 30, 2019||June 30, 2018|
|Chargebacks and listing fees||-$1,151,894||-$840,429|
|Other One-time Expenses||$868,984||$148,220|
|Non Cash Expenses||$875,666||$895|
|Loss before other Income (Expense)||-$5,010,380||-$2,188,842|
|Other income (Expenses)|
|Foreign exchange (loss) gain||-$17,240||-$709|
|Loss on legal settlement||-$215,930|
|Write-off of inventory||-$7,298||-$242,399|
|Write-off of equipment||-6,936|
|Write-off accounts payable|
|Charges relating to public company listing||-$918,345|
|Income (Loss) and comprehensive Income (loss) for the period||-$5,943,852||-$2,652,986|
|Basic and diluted income (loss) per common share||-$0.07||-$0.07|
|Weighted average number of common shares outstanding||85,543,433||40,229,986|
The Company presently has one business segment, the marketing and distribution of alcohol-free beer and wine in Canada and, to a much lesser extent, the United States. Hill Street sells its products online and into approximately 10,000 points of distribution in retail large chain stores in Canada. Hill Street's investment in it Distributor/ Broker networks has resulted in significant new distribution and retail listings. It also provides a direct consumer subscription service at www.hillstreetbevco.com.
Non-Alcoholic Adult Beverages
According to a leading beverage industry market research firm1, the non-alcoholic wine and beer market consistently ranks as one of the fastest growing sectors in the global beverage industry and is expected to generate 8.5% CAGR globally until 2025. In Canada, the segment has experienced annual growth in excess of 20% a year for the past few years, which has seen the launch of new alcohol-free beer brands from the top brewers in the world, in addition to new craft beer offerings from regional and local brewers. Hill Street has acquired a significant part of this growth, leveraging our relationship with major national retailers to expand our presence on shelf, as well as securing the opportunity to produce private label versions of our products for major retailers.
Cannabis-infused Adult Beverages
According to Statistics Canada, there are approximately 20 million consumers who drink alcohol. Per capita, the Canadian consumer drank approximately 255 (371 ml size) bottles per capita in 2015, implying that more than 5 billion bottles of beer were consumed during that year. The annual decline of beer consumption in Canada is 0.7%, as consumers trend to moderation and look for alternatives to alcohol given its negative impact on their health and lifestyle.
Since regulations prohibit the mixing of alcohol and cannabis in a commercial product, a beverage must contain no alcohol if cannabis is to be added to it, and the removal of alcohol from traditional beer and wine changes the flavour profile of the beverage. For this reason, any producer of traditional alcoholic beer or wine wishing to create a cannabis-infused version of its products would first have to produce great tasting alcohol-free versions of their brands that consumers would enjoy. Having already solved this problem, Hill Street is proceeding on to the next stage-infusing its beverages with cannabis. Management's license agreement with Lexaria Bioscience , provides the Company with access to technology to render cannabis into an odorless and tasteless water-soluble powder which can then be added to its alcohol-free beverages.
Hill Street believes that the cannabis-infused beverage segment can best be described as three distinct beverage categories: 1) "Heighten" (adult recreational use); 2) "Help" (therapeutic or functional beverages); and 3) "Heal" (beverages) and medicinal or prescription beverages). We intend to produce, market and sell beverages for the adult use and therapeutic or functional beverage categories.
Hill Street intends to meet this potential demand with the same type of high quality and award-winning products we have produced for the alcohol-free category, and with the same level of focus on brand development, sales and distribution.
About Hill Street Beverage Company Inc. (TSXV: BEER)
Founded in 2008, Hill Street Beverage Company is the world's most award-winning company exclusively focused on alcohol-free beer, wine, and adult format beverages. Hill Street products include: Hill Street Craft Brewed Lager, Designated Draft alcohol-free beer, Vin(Zero) wines, and Vintense wines. Hill Street's award-winning products have won the Retail Council of Canada's Grand Prix, and numerous medals and accolades including three Gold, two Silver, and two Bronze Medals at the U.S. Open Beer Championships, and a prestigious Double Gold Medal at the San Francisco International Wine Challenge. As a result of the Royal Assent of Canada's Bill C-45, legislation to allow the sale of cannabis-infused beverages is expected to occur by October 17, 2019. Hill Street is currently applying for appropriate licenses to permit the production and sale of cannabis infused beverages in Canada, with the view of having infused products available for sale once the regulations permit. www.hillstreetbeverages.com
1 Mintel, Global Food and Drink Trends, 2019
For further information:
Terry Donnelly, Chairman and CEO, Hill Street Beverage Company Inc.,
firstname.lastname@example.org, (416) 543-4904
Sean Peasgood Investor Relations,
email@example.com, (647) 797-0219
Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects" and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/49223