NEWS
BULLETIN
Friday, Augest 23, 2002
CBR Brewing Company, Inc. Reports Operating Results
for the Three Months and Six Months Ended June 30, 2002
Hong Kong, August 23, 2002 - CBR Brewing Company, Inc.
(OTC Bulletin Board: CBRB) (the "Company") announced the results of its operations for the three months
ended June 30, 2002, reporting net sales of $19,697,057 and a net loss of $12,375,085, as compared to
net sales of $22,536,947 and a net loss of $3,262,181 for the three months ended June 30, 2001.
Included in net loss for the three months ended June 30, 2002 was a charge of $4,819,277 for the
impairment of property, plant and equipment. Included in net loss for the three months ended June
30, 2001 were charges aggregating $2,716,300 for restructuring costs and the write-off of an
investment in a subsidiary. Net loss per common share (basic and diluted) was $1.54 in 2002 and
$0.41 in 2001. Weighted average common shares were 8,010,013 in 2002 and 2001
(basic and diluted).
For the six months ended June 30, 2002, the Company
reported net sales of $42,059,173 and a net loss of $12,429,261, as compared to net sales of $48,135,443
and a net loss of $4,275,806 for the six months ended June 30, 2001. Included in net loss for the six
months ended June 30, 2002 was a charge of $4,819,277 for the impairment of property, plant and equipment.
Included in net loss for the six months ended June 30, 2001 were charges aggregating $3,047,625 for the
impairment of property, plant and equipment, restructuring costs and the write-off of an investment in a
subsidiary. Net loss per common share (basic and diluted) was $1.55 in 2002 and $0.53 in 2001. Weighted
average common shares were 8,010,013 in 2002 and 2001 (basic and diluted).
For the three months and six months ended June 30, 2002,
the Company's affiliate, Noble Brewery, recorded a charge of $7,831,325 for the impairment of property, plant
and equipment.
During the three months ended June 30, 2002 and 2001, the
Company sold 40,816 metric tons and 42,885 metric tons of beer, respectively, a decrease of 4.8%. During
the six months ended June 30, 2002 and 2001, the Company sold 80,530 metric tons and 85,829 metric tons
of beer, respectively, a decrease of 6.2%. 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. The Company expects
that these market pressures will continue during the remainder of 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 June 30, 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 Canadian public company that is the 60%
owner of Noble Brewery, 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
November 7, 2003. Noble China Inc. has recently publicly reported that it was experiencing severe financial
difficulties, was unable to meet its financial commitments and is insolvent, and is considering 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 6, 2003. Management
is currently unable to predict the effect that these developments may have on future operations, including any
effect on the Company's ability to obtain a sub-license to produce and distribute Pabst Blue Ribbon beer in
China effective from November 7, 2003, or the impact on Noble Brewery, the Company's affiliate. 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.
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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