NEWS
BULLETIN
Tuesday, November 7, 2000
CBR Brewing Company, Inc. Reports
Third Quarter 2000 Operating Results
HONG KONG, Nov 7, 2000
/PRNewswire via COMTEX/ -- CBR Brewing Company, Inc. (OTC Bulletin Board:
CBRB) (the "Company") announced its results of operations for the three
months ended September 30, 2000, reporting net sales of $23,047,338 and a
net loss of $944,398, as compared to net sales of $30,212,718 and net income
of $504,494 for the three months ended September 30, 1999. Net income (loss)
per common share (basic and diluted) was ($0.12) in 2000 as compared to $0.06
in 1999. Weighted average common shares outstanding (basic and diluted) were
8,010,013 in 2000 and 1999.
During the nine months ended
September 30, 2000, the Company reported net sales of $92,662,484 and net income
of $168,354, as compared to net sales of $97,424,788 and net income of $2,335,798
for the nine months ended September 30, 1999. Net income per common share (basic
and diluted) was $0.02 in 2000 as compared to $0.29 in 1999. Weighted average
common shares outstanding (basic and diluted) were 8,010,013 in 2000 and
1999.
During the three months ended
September 30, 2000 and 1999, the Company sold 41,430 metric tons and 50,721 metric
tons of beer, respectively, a decrease of 18.3%. During the nine months ended
September 30, 2000 and 1999, the Company sold 156,449 metric tons and 159,114
metric tons of beer, respectively, a decrease of 1.7%. Beer sales decreased in
2000 as compared to 1999 as a result of a decrease in the volume of beer sold
due to a weakening in customer demand in China for foreign premium brands such
as Pabst Blue Ribbon beer, as well as increasing competition from both foreign
premium brands and local brands, which accelerated during the three months ended
September 30, 2000. As a result of softening sales and substantial continuing
marketing, advertising and promotional expenditures, the Company expects a
continuing deterioration in sales and operating results during the three months
ending December 31, 2000, with an operating loss likely for this period. The
Company expects that current economic conditions will continue in 2001, and is
therefore considering the implementation of certain cost control
measures.
CBR Brewing Company, Inc.,
through its subsidiaries and affiliates, is engaged in the production, distribution
and marketing of Pabst Blue Ribbon beer in the People's Republic of China. As of
September 30, 2000, the Company owned effective interests of 60%, 24%, 33% and 9% in
four brewing facilities currently producing Pabst Blue Ribbon beer in the People's
Republic of China, all of which are managed by the Company. The Company produces
Pabst Blue Ribbon beer under a sublicense agreement with Guangdong Blue Ribbon Group
Co. Ltd. ("Guangdong Blue Ribbon"), a related company, which expires on November 6,
2003.
Noble China Inc., a public company
listed on the Toronto Stock Exchange, issued a press release on May 27, 1999 to
announce that it had acquired from Pabst Brewing Company the exclusive rights to brew
and distribute Pabst Blue Ribbon beer throughout China for a period of 30 years from
2003 to 2033. Management has consulted with legal counsel regarding the legitimacy of
the purported license and the Company's potential responses. In addition, management
has consulted with Guangdong Blue Ribbon, the owner of the Pabst Blue Ribbon trademark
in China, regarding potential responses, and has met with representatives of Noble
China Inc. in an attempt to explore a potential settlement. In August 2000, the
Company and Noble China Inc. agreed to establish a management committee to evaluate
the potential to enhance the operations of their respective breweries in China through
cooperative efforts, including the possibility of combining brewing and marketing
operations into one entity.
Management of the Company has requested
that Guangdong Blue Ribbon take appropriate action to protect its rights and its
sub-licensees' rights to utilize the Pabst Blue Ribbon trademark in China. The Company
has been advised that Guangdong Blue Ribbon is still evaluating the situation and has
not yet determined how it will respond to this matter. Once Guangdong Blue Ribbon has
responded, the Company expects to be in a position to evaluate and revise its future
business plan and strategy accordingly. The Company is currently unable to predict the
effect that this development may have on future operations. However, the inability of
the Company to obtain a sub-license from Noble China Inc. or enter into some other form
of strategic relationship under acceptable terms and conditions that would allow the
Company to continue to produce and distribute Pabst Blue Ribbon beer in China would
have a material adverse effect on the Company's future results of operations, financial
position and cash flows.
For further information,
contact investor relations at (818) 789-0488.
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