Sleeman Breweries cutting jobs as revenue, earnings fall

Sleeman Breweries cutting 40 jobs as Q2 earnings and revenue drop

Sleeman Breweries reported lower sales and earnings in the second quarter, and said it's eliminating 40 jobs.

The Guelph, Ont., beer company (TSX:ALE) said it made $2.5 million (15 cents a share), down from $3.8 million (23 cents a share) in the second quarter of 2004.

The company's revenue for the quarter was $57.9 million compared to $58.7 million a year earlier.

"We had a challenging quarter due to the wet and cool spring across the country, the National Hockey League lockout and continued price discounting in our key markets," said John Sleeman, the company's chairman and CEO.

"In addition, the second quarter of last year benefited from the distribution strike in British Columbia and the first summer sales of our very successful low carbohydrate beer Sleeman Clear," he said.

The company said the 40 job cuts come as it tries to reduce its costs by $1 million in the current fiscal year. Sleeman will record a one-time charge of $2.1 million in the third quarter in connection with the job cuts.

"After several years of expansion, it is time to take a closer look at the way we operate and make the necessary changes to improve the business and our cost structure for the future," said John Sleeman.

"These initiatives will help us achieve our target of 10 per cent annual normalized [earnings per share] growth in the current fiscal year and will leave us well positioned for the future."

Sleeman shares fell 50 cents on Wednesday to close at $13.50 on the TSX.