NEWS
BULLETIN
Monday, May 20, 2002
CBR Brewing Company, Inc. Reports Operating Results
for the Three Months Ended March 31, 2002
Hong Kong, May 20, 2002 - CBR Brewing
Company, Inc. (OTC Bulletin Board: CBRB) (the "Company") announced the results of its operations
for the three months ended March 31, 2002, reporting net sales of $22,362,116 and a net loss of
$54,176, as compared to net sales of $25,598,495 and a net loss of $1,013,625 for the three
months ended March 31, 2001. Included in net loss for the three months ended March 31, 2001
were fixed asset write-offs totaling $331,325. Net loss per common share (basic and diluted)
was $0.01 in 2002 and $0.13 in 2001. Weighted average common shares were 8,010,013 in 2002 and
2001 (basic and diluted).
During the three months ended March 31, 2002 and
2001, the Company sold 39,714 metric tons and 41,701 metric tons of beer, respectively, a decrease
of 4.8%. Beer sales decreased in 2002 as compared to 2001 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. Although revenues declined in
2002 as compared to 2001, the comparable net loss was reduced due to improved coordination of human,
financial, production and marketing activities instituted by the management committee, as described
below. The Company expects that these market pressures will continue during 2002, resulting in net
losses for the near term.
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, 2002, 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 through the first half of 2002, it would be unable to meet its financial commitments and would
face insolvency proceedings, and be forced to consider various courses of action.
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 is expected to achieve greater efficiency and improved operating profitability
in the future. The management committee is also responsible for commencing 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 contained 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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