Leading Brands of Vancouver, Canada, reported substantial losses over the first three quarters of its 2007/08 fiscal year. Gross sales in the nine months to 30 November 2007 fell 32% to US$27.45 million, and the company lost $3.28 million (or $0.18 per share) after breaking even in the same period of 2006/07.
Leading Brands’ sales in the third quarter of the current year were 25% down at $8.56 million, and the company finished with a loss of $1.64 million (or $0.08 per share) against a loss of $584,000 in 2006/07
Leading Brands, which claims to be “North America’s only fully integrated premium beverage company”, is refocusing its operations on producing and distributing its own drinks, rather than working for other brand owners. But the changeover is proving a costly business.
The company’s drop in revenue was due to the discontinuance of three lines previously produced under contract. Meanwhile, however, sales of Leading Brands’ proprietary beverages such as TrueBlue blueberry juice drink have been increasing – growing 55% in the second quarter of 2007/08, and 63% in the third quarter.
Chairman and CEO Ralph McRae highlighted this point, telling shareholders: “This was the first time in my memory that our core business grew from the second quarter to the third. Seasonality normally works against that trend. Both gross and net sales in Q3 were up slightly over Q2.
“Last year, gross sales dropped almost 27% from the warmer summer quarter to the cooler fall quarter, which is the norm in the beverage business. Continued strong branded beverage growth fuelled that condition [increased Q3 sales] this year.”
The company also announced that Donna Louis has resumed the post of Chief Financial Officer, replacing Don Haliburton who has left the company.
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