NEWS
BULLETIN
Wednesday, May 16, 2001
CBR Brewing Company, Inc. Reports
First Quarter 2001 Operating Results
Hong Kong, May 16, 2001 - CBR Brewing
Company, Inc. (OTC Bulletin Board: CBRB) (the "Company") announced the results of its
operations for the three months ended March 31, 2001, reporting net sales of $25,598,495
and a net loss of $1,013,625, as compared to net sales of $35,780,582 and net income of
$572,866 for the three months ended March 31, 2000. Included in the net loss for the
three months ended March 31, 2001 was a charge of $331,325 for the impairment of property,
plant and equipment relating to the shut-down of the Jilin Lianli Brewery. Net loss per
common share (basic and diluted) was $0.13 per common share in 2001 as compared to net
income per common share (basic and diluted) of $0.07 in 2000. Weighted average common
shares were 8,010,013 in 2001 and 2000 (basic and diluted).
During the three months ended March 31,
2001 and 2000, the Company sold 41,701 metric tons and 58,394 metric tons of beer,
respectively, a decrease of 28.6%. Beer sales decreased in 2001 as compared to 2000 as
a result of a decrease in volume of beer sold, reflecting a weakening in consumer demand
for foreign branded premium beers in China and the intense competition among all breweries
in China. The Company expects that these pressures will continue over the near-term.
Although the Company has commenced an overhaul of its operations and marketing programs
in order to return to profitability in the near future, there can be no assurances
that the Company will be successful in this regard.
The Company, through its subsidiaries
and affiliates, is engaged in the production, distribution and marketing of Pabst Blue
Ribbon beer in China. As of March 31, 2001, the Company owned effective interests of 60%,
24% and 33% in three brewing facilities in China producing Pabst Blue Ribbon beer that
are managed by the Company. The Company produces Pabst Blue Ribbon beer under a sublicense
agreement with Guangdong Blue Ribbon Group Co. Ltd., an affiliated company, which expires
concurrently with the expiration of the existing master license agreement between Guangdong
Blue Ribbon Group Co. Ltd. and Pabst Brewing Company on November 6, 2003.
Noble China Inc. is a public company listed
on the Toronto Stock Exchange that is the 60% shareholder of a Pabst Blue Ribbon brewing
facility in Zhaoqing, China in which the Company has a 24% net equity interest. Noble China
Inc.'s 2000 Annual Report stated that in May 1999 it had entered into a license agreement
with Pabst Brewing Company granting it the right to utilize the Pabst Blue Ribbon trademarks
in connection with the production, promotion, distribution and sale of beer in China for 30
years commencing in November 2003. Management of the Company has met with representatives
of Noble China Inc. in an attempt to explore a potential relationship subsequent to November
2003. Management is currently unable to predict the effect that this development may have
on the Company's operations subsequent to November 2003. However, the inability of the
Company to obtain a sub-license from Noble China Inc. on acceptable terms and conditions
that would enable 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.
During December 2000, the Company and Noble
China Inc. signed a memorandum pursuant to which a management committee was established to
evaluate the potential to coordinate and enhance the operations of the entities in China
controlled by the Company and Noble China Inc. that produce, distribute and market Pabst
Blue Ribbon beer. Effective January 1, 2001, the management, marketing, production and
operations of each company's respective operations were pooled together under a newly-created
management entity named "Blue Ribbon Enterprises" in order to achieve improved coordination
of human, financial, production and marketing activities. However, these entities will
remain as legally distinct entities. This pooled management structure is expected to
achieve improved efficiency and operating profitability. After the pooled management
structure has begun to function smoothly, it is expected that the management committee will
commence a study to evaluate the formation of a new unified company to produce, distribute
and market Pabst Blue Ribbon beer in China.
For further information,
contact investor relations at (310) 274-5172.
|
