Second Quarter Highlights:

• Net revenue increased 2.7% to $17.0 million up from $16.6 million in the prior year.
• Gross margin improved to 35.3%, compared to 30.9% the prior year, excluding one-time costs.
• Selling, Marketing, and Administration ("SM&A") expenses were $3.8 million up from $2.8 million prior year.
• EBITDA* increased 8.1% to $3.6 million, compared to $3.3 million prior year, excluding one-time costs.
• The Board of Directors approved the quarterly dividend, $0.025/share, payable October 30, 2019, to shareholders of record as of October 16, 2019. The dividend is classified as an eligible dividend.

First Half Highlights:

• Net revenue increased 7.6% to $29.4 million up from $27.3 million in the prior year, excluding one-time costs.
• Gross Margin improved to 29.3%, compared to 27.4% the prior year, excluding one-time costs.
• Selling, Marketing, and Administration ("SM&A") expenses were $5.9 million up from $4.9 million prior year.
• EBITDA* increased 18% to $5.2 million, compared to $4.4 million in the prior year, excluding one-time costs.

KITCHENER, ON, Sept. 5, 2019 /CNW/ - Waterloo Brewing Ltd. ("Waterloo Brewing" or the "Company") (TSX: WBR), Ontario's first Craft Brewery, announced financial results for the second quarter ended July 28, 2019. Waterloo Brewing reported EBITDA of $3.6 million on net revenue of $17.0 million.

"We are extremely pleased with our overall second-quarter results.  The incremental investment in our brands resulted in strong volume growth, enhanced revenue, margin expansion, and improved EBITDA performance.  Despite the 3.4% drop in overall Ontario beer industry volume, the Laker family grew 12% and our summer-themed brands LandShark^® and Margaritaville^® grew 14%", commented George Croft, President, and Chief Executive Officer.

"Our warehouse expansion, cannabis-infused beverage facility, non-alcoholic beer equipment, and new Small Batch Brewhouse / Taphouse are all on schedule and on budget.  We are unbelievably excited about the impacts that these projects will bring to the organization in terms of new capacity, new capabilities, and product innovation", commented Russell Tabata, Chief Operating Officer.

Solid top-line revenue growth of 5.8% delivered positive margin recovery in the second quarter.  Despite the negative pressure caused by competitive pricing and increased taxes, margins have returned to a plus 30% level. "Co-pack continues to be a strong and healthy part of the business and continues to generate incremental cash flow. YTD the business has grown 9.7% and we expect strong growth for the balance of the year," commented George Croft.

Waterloo Brewing's board of directors has approved the quarterly dividend at $0.025/share.  The dividend is payable on October 30, 2019, to shareholders of record as of October 16, 2019.

The following financial information should be read in conjunction with the audited annual financial statements of the Company prepared under IFRS for the year ended January 31, 2019.

STATEMENTS OF COMPREHENSIVE INCOME

Quarters ended July 28, 2019 and July 29, 2018

STATEMENTS OF FINANCIAL POSITION

Quarters ended July 28, 2019 and January 31, 2019

STATEMENTS OF CASH FLOWS

Quarters ended July 28, 2019 and July 29, 2018

About Waterloo Brewing

Waterloo Brewing is Ontario's largest Canadian-owned brewery. The Company is a regional brewer of award-winning premium quality and value beers and is officially certified under the Global Food Safety Standard, one of the highest and most internationally recognized standards for safe food production. Founded in 1984, Waterloo Brewing Ltd. (formerly Brick Brewing Co. Limited) was the first craft brewery to start up in Ontario and is credited with pioneering the present day craft brewing renaissance in Canada. Waterloo Brewing has complemented its Waterloo premium craft beers with the popular Laker brand.  In 2011, Waterloo Brewing purchased the Canadian rights to Seagram Coolers and in 2015, secured the exclusive Canadian rights to both LandShark and Margaritaville. In addition, Waterloo Brewing utilizes its leading-edge brewing, blending and packaging capabilities to provide an extensive array of contract manufacturing services in beer, coolers, and ciders. Waterloo Brewing trades on the TSX under the symbol WBR. Visit us at www.WaterlooBrewing.com.

Forward-Looking Statements

All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements as of the date of this press release. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "seek", "plan", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, undue reliance should not be placed on these forward-looking statements, which are not guarantees and are subject to certain risks, uncertainties, and assumptions, which may cause actual performance and financial results to differ materially from such forward-looking statements. The forward-looking statements included in this press release are made only at the date of this press release and, except as required by applicable securities laws, the Company does not undertake to publicly update such forward-looking statements to reflect new information, future events or otherwise.

* EBITDA is a non-IFRS earnings measure, therefore it does not have any standardized meaning prescribed by International Financial Reporting Standards and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, depreciation, and amortization, gain or loss on disposal of property, plant, and equipment, and share-based payments. Management uses this measurement to evaluate the operating results of the Company. This measure is also important to management since it is used by the Company's lenders to evaluate the ongoing cash-generating capability of the Company and therefore the amounts those lenders are willing to lend to the Company. Investors find EBITDA to be useful information because it provides a measure of the Company's operating performance.

SOURCE Waterloo Brewing Ltd.

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