Jon: The following is from LBI... Lengthy but interesting... I did a cut and paste and lost the columns but all the info is there
Tree Brewing Co.
(VSE: HOP)
Business Summary
Tree Brewing Co., (HOP) is involved in the business of producing and marketing ales and lagers generally known as craft beer at its microbrewing facility in KELOWNA B.C. The company has one wholly owned subsidiary, Okanagan Juice and Wine laboratory Inc., (OK Lab) incorporated on August 26, 1994. OK Lab is involved in the chemical testing of beer and wine samples. Ok lab conducts microbiological testing of the company's products to ensure against contamination. Between October 1, 1995 and April 29, 1996 the company established its microbrewery operations and commenced production. The sale of its first products (Tree Amber Ale and Tree lager)was on April 30, 1996. The Spy dark Lager became available in August 1996 in Kegs and In November 1996 in bottles. The spiced mid-winter Ale debuted in November and December of 1996 and again in November 1997 to January 1998. The Red Ale was recently introduced in March, 1997.
Financial Information
According to management figures, sales in the first quarter of 1998 continue to show strong growth (Nov. 1 1997 to Jan. 31, 1998) and were up 20% over the comparative quarter. Sales for fiscal 1997 the company's first full year (ended Oct. 31, 1997) were $1.91 million which after government taxes and levies netted the company $925,000, up from a net of $176,000 in seven months of 1996. The company has made some physical changes in 1997 that have improved product quality and production efficiencies. The company has working capital of $600,000 with nominal debt. Hop has completed their expansion from 1 million liters a year tom2 million liters a year allowing for
gross sales at capacity of approximately $7.0 million which will give the company estimated earnings of $.18 per share. These improvements have allowed the company to increase their gross margin in the first quarter from 46% to 50%. Microbreweries typically trade at a P.E. Ratio of 30
The Products
To date the company has developed 4 main and one seasonal beer. All five products are in commercial production and are available in 6 X 341 ml six packs and 30 liter and 50 liter kegs with the exception of the spiced midwinter Ale, available in 650 ml bottles and 50 liter kegs during the winter season. The first two products, Amber Ale and
Lager were developed together with the company's former brewmaster Ken Belau. The Amber Ale and Lager were brewed with a variety of different recipes and then taste tested by the core staff. After conducting focus group tests in Kelowna and Vancouver, the Company chose to emphasize the name "Tree" and to name its beers after their
style. The first batch of Amber Ale and lager were produced in March of 1996 and available for sale at the end of April, 1996. The Company developed and released its third product, the Spy Dark Lager which is a dark lager,malty with a hint of chocolate, fashioned after the German Dunkel lagers. For a winter specialty release, the Company produced a Spiced Midwinter Ale made with cinnamon, coriander and orange peel. The Company's fifth product, the red Ale, is a hoppy , full-bodied ale which was developed and released in March of 1997.
Stock Information
Business: Producing & Marketing Specialty Beer Products
Exchange: New Listing on Vancouver Stock Exchange
Market Symbol: HOP
Market Price: $.85
Shares Out: 5,100,000
Float (est.) 1,000,000
Insider Ownership: 24.8%
Fiscal Yr. End: October 31
Company Contact:
Website: www.tree-brewing.com
Investor Contact:
LBI Group Inc.
10100 W. Sample Rd.
Suite 401
Coral Springs, Fl. 33065
Tel: (800) 913 - 9767
Fax: (954) 346- 5796
Website: www.lbigroup.com
Management
The company has a total of 16 full and part time employees. The employees forming the management team and the Directors of the Company are as follows:
George Michael Twyman, age 32, is the founder, President and Director of the Company. Mr Twyman established Okanagan Juice and Wine Laboratory Inc., the Company's subsidiary, as a full service quality control laboratory to service the estate wine industry as well as the B.C. government's Vintner's Quality alliance (VQA). Mr.Twyman continues to serve as President of Okanagan Juice and Wine Laboratory's Inc. Mr.Twyman has a Bachelor of Science degree in general biology from the University of Calgary in Alberta.
Malcolm Ian Skinner, age 48, is the Vice President of marketing and a director of the Company. Prior to joining the Company, Mr Skinner was with Academy Brands where he served as Sales Manager for Western Canada for three years. Prior to that Mr Skinner held the position of Sales Manager for Western Canada for Labatt International.Mr
Skinner was also a sales representative for Calona Wines during October, 1980 until August, 1989. Mr. Skinner has several years of experience in the B.C. hospitality industry, including five years in restaurant and bar management and fifteen years in the Beverage Alcohol business (in sales, merchandising, marketing and sales management.) Mr. Skinner is also actively involved in the Craft Brewer's Association. Mr. Skinner has a Bachelor of Arts degree from
Carleton University in Ottawa, Ontario.
Dave Charles Willoughby, age 29, is the Vice President of Sales and Director of the Company. Mr. Willoughby has a master of science (Community Health) degree from the University of Calgary, in Calgary, Alberta.
Stephanie Jean Willoughby age 29, is the Retail Service Manager of the Company. Ms. Willoughby graduated from the Simon Fraser University with a Bachelor of Arts majoring in Criminology and Psychology.
Fredrick George Orr, C.P.A., age 36, is the interim Chief Financial Officer and Secretary of the Company. Mr. Orr has been an accountant with Britton Capital Corporation since July, 92. Mr. Orr was employed by Chambers & Phillips, Chartered Accountants as an accountant from June 1990 until June 1992. He serves as a director and/or Senior Officer of a number of companies. Mr. Orr has a Bachelor of Commerce degree from Saint Mary's University in Halifax, Nova Scotia.
Highlights
*Sixth largest microbrewery out of the 18 in B.C. in less than two years of operation.
*Won three Silver Medals in the World Beer Championship Competition in Chicago in 1997 with over 1,500 breweries participating worldwide- Amber Ale, Red Ale, Spiced Midwinter Ale.
*Close to 200 draft accounts and 4 products in liquor stores across B.C. and Alberta.
*The Company has several large sales contracts under negotiations.
*The release of the Tree Blonde Lager with lower bitterness creates a lighter beer for the summer, in addition, company completed market testing for a new Pale Ale and will be in commercial production shortly.
*$2 million in sales in 1997 with $3 plus million slated for 1998.
*Company intends to list on NASDAQ BB in near future.
The Market
The market for the company's products have shown significant growth over the last seven years and continues to grow over 25% a year. According to the B.C. Liquor Board, craft beer sales in B.C. now account for 4.5% of the total volume of draft and packaged beer sold in B.C. (Excluding 4.4% volume by Okanagan Spring Brewery, a
competitor of the Company's which is too large to be considered a craft brewery)
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