NEWS
BULLETIN
Thursday, April 18, 2002
CBR Brewing Company, Inc. Reports Operating Results
For the Year Ended December 31, 2001
HONG KONG, Apr 18, 2002 /PRNewswire-FirstCall
via COMTEX/ -- CBR Brewing Company, Inc. (OTC Bulletin Board: CBRB) (the "Company") announced
the results of its operations for the year ended December 31, 2001, reporting net sales of
$85,999,349 and net loss of $3,527,354, as compared to net sales of $113,391,270 and a net
loss of $3,482,553 for the year ended December 31, 2000. Included in net loss for the years
ended December 31, 2001 and 2000 were fixed asset write-offs and restructuring costs totaling
$3,450,529 and $725,537, respectively. Net loss per common share (basic and diluted) was $0.44
per common share in 2001 and 2000. Weighted average common shares were 8,010,013 in 2001
and 2000 (basic and diluted).
During the years ended December 31, 2001 and
2000, the Company sold 152,967 metric tons and 195,510 metric tons of beer, respectively, a
decrease of 21.8%. 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 increasing competition from local and foreign premium brands of beer, as
well as a 13.6% increase in the consumption tax on beer produced in China. The Company expects
that these pressures will continue during 2002, resulting in a net loss for at least the three
months ended March 31, 2002.
The Company, through its subsidiaries and affiliates,
is engaged in the production, distribution and marketing of Pabst Blue Ribbon beer in China. As of
December 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.:
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. has publicly reported that
in May 1999 it 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. Noble China Inc. has also
recently publicly reported that it was experiencing certain financial difficulties, and that if such
difficulties continued into the first half of 2002, it would soon face insolvency.
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 these developments 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 structure in order to achieve improved coordination of human,
financial, production and marketing activities, although these companies will remain as legally distinct
entities. The restructuring program implemented by the management committee during 2001 resulted in a
charge to operations of $2,687,860 for restructuring costs in 2001. The restructuring program is expected
to achieve greater efficiency and improved operating profitability in the future. The management committee
will also commence a study to evaluate the formation of a new unified company to produce, distribute and
market Pabst Blue Ribbon beer in China.
The Company's controlling shareholder, Zhaoqing City Lan
Wei Alcoholic Beverage (Holdings) Limited, a company controlled by the City of Zhaoqing, owns a 19.6%
equity interest in Noble China Inc.
Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:
This news release contains "forward-looking" statements,
which are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, among others, statements of expectations, beliefs, future plans and
strategies, anticipated events or trends, and similar expressions concerning matters that are not historical
facts. The forward-looking statements in this news release are subject to risks and uncertainties that could
cause actual results to differ materially from those results expressed in or implied by the statements
ontained herein. The Company undertakes no obligations to revise or update any forward-looking statements
contained herein in order to reflect events or circumstances that may arise after the date of this news
release.
For further information,
contact investor relations at (310) 274-5172.
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