SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE
ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of January 2003
LEADING BRANDS, INC.
(Registrant)
160 - 7400 River Road, Richmond, British Columbia V6X 1X6
Canada
(Address of Principal Executive Offices)
(Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F [ X ] Form 40-F [ ]
(Indicate by check mark whether the Registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes [ ] No [ X ]
(If “Yes” is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b).)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LEADING BRANDS,
INC. |
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| (Registrant) | ||
Date February
10, 2003 |
By | /s/ Marilyn Kerzner |
| (Signature) | ||
Marilyn Kerzner |
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Director of Corporate
Affairs |
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MATERIAL CHANGE REPORT
| Item 1. | Reporting Issuer: |
| Leading Brands, Inc. (the “Company”) | |
| 160 – 7400 River Road | |
| Richmond BC V6X 1X6 | |
| Item 2. | Date of Material Change: |
| February 10, 2003 | |
| Item 3. | Press Release: |
| A press release announcing the material change was issued on February 10, 2003 for Canadian and U.S. distribution through Canadian Corporate News. | |
| Item 4. | Summary of Material Change: |
| Leading Brands’ subsidiary, Quick Home Delivery (Canada), Inc. has determined to suspend home delivery service in the Greater Vancouver area after February 28, 2003. | |
| The Company will recognize a non-cash charge of approximately $6,500,000 US against its long term investment in the fourth quarter of its 2002 fiscal year ended February 28, 2003 to reflect this event. | |
| Item 5. | Full Description of Material Change: |
| Effective January 1, 2001 the Company sold the business and certain intellectual property and capital assets of its online home shopping business to Northland Technologies Inc. (NTI) in exchange for preferred shares in NTI with a stated value of $7.8 million US. The value attributed to the shares was $4,584,301 US, which was the book value of the assets disposed of. | |
| The Company at that time also entered into a management agreement to provide certain management and administrative services to NTI until February 28, 2003. Subsequent to the disposition of the property the Company advanced further funds to NTI primarily for marketing costs, purchases of capital assets and some overhead costs. To support the Company's investment, further advances were anticipated.The Company had provided an allowance for all advances made since July 2002. | |
| The Company determined that future advances to support this investment were no longer in the best interests of the Company and decided effective February 28, 2003 to cease funding and managing the online home shopping business. | |
| The Company will recognize a non-cash charge of approximately $6,500,000 US representing the carrying value of its long term investment and advances plus estimated net costs to the date of closure. | |
| Changes in future conditions could require a material change in these recognized amounts. | |
| Item 6. | Reliance on Section 85(2) of the Act: |
| Not applicable | |
| Item 7 | Omitted Information: |
| Not applicable | |
| Item 8. | Senior Officer: |
| Derek Henrey, Chief Financial Officer | |
| (604) 214-9722 (Ext. 313) | |
| Item 9. | Statement of Senior Officer: |
| The foregoing accurately discloses the material change referred to herein. |
Dated at Richmond, British Columbia, this 10th day of February, 2003
Derek Henrey
Chief Financial Officer
| FOR IMMEDIATE RELEASE | ||
| CONTACTS: | ||
| Ralph D. McRae | Derek Henrey | Gerry Kenyon |
| Chairman and CEO | CFO | President |
| Leading Brands, Inc. | Leading Brands, Inc. | Quick Home Delivery |
| Tel: (604) 214-9722 ext. 238 | Tel: (604) 214-9722 ext. 313 | Tel: (604) 639-5300 ext. 315 |
| Email: rmcrae@LBIX.com | Email: dhenr@LBIX.com | Email: gkenyon@quick.com |
LEADING BRANDS, INC. ANNOUNCES
Suspension of Home Delivery Service to Add Approximately $0.06 US
to Fiscal 2003 – 04 Earnings
Company will Take Non-Cash Charge of Approx $6,500,000 US in Q4 2002 - 03
VANCOUVER, CANADA, February 10, 2003, LEADING BRANDS, INC. (NASDAQ: LBIX, TSX: LBI), Canada’s largest independent, fully integrated premium beverage company, announces that its Quick Home Delivery subsidiary has determined to suspend home delivery service in the Greater Vancouver area after February 28, 2003. The date coincides with the end of the initial term of the company’s agreement to manage the service.
This move will add approximately $0.06 US per share to Leading Brands’ earnings next year. The Company will recognize a non-cash charge of approximately $6,500,000 against its long term investment in the fourth quarter of its 2002 fiscal year ended February 28, 2003 to reflect the event.
Leading Brands Chairman & CEO Ralph McRae said: “This was a difficult decision. Quick was able to meet or exceed every significant operational milestone. However, the business has reached a level where, in order to continue its growth, we needed to start expending material sums on marketing. That would have cut into Leading Brands’ consolidated earnings in fiscal 2003. With financial markets focused on profit growth, we made the tough decision between investing to grow Quick for the future and enhancing Leading Brands’ profitability now. Operationally, this step will further allow us to concentrate on building our beverage brands, both here and abroad.”
Mr. McRae continued: “Although we believe it prudent to take a charge on our investment in Quick in Q4 of our present fiscal year, we have managed to build some very efficient and effective technology that we will apply to further enhance efficiencies in our wholesale operations.”
Gerry Kenyon, President of Quick Home Delivery added: “Although we are disappointed with this decision, we are proud of what we have been able to accomplish at Quick. We at the same time want to apologize to our many home delivery customers who have come to rely on the service and thank them for their support. We will strive to provide the same high level of service through to our last day of deliveries on Friday, February 28.”
About Leading Brands, Inc.
Leading Brands, Inc. (NASDAQ:LBIX, TSX:LBI) is the largest independent, fully integrated premium beverage company in Canada. The Company’s unique Integrated Distribution System (IDS) ™ offers turnkey, one-stop shopping to food and beverage brand owners, including manufacturing, distribution, sales/marketing and licensing. In addition, Leading Brands produces their own line of beverages such as TREK™, Pez® 100% Juices™, Johnny’s Roadside® Iced Tea and Lemonade, Country Harvest® Juices, Caesar’s® Bloody Caesar Cocktail, and Cool Canadian® Water. Leading Brands recently undertook a major expansion into the United States, with its US headquarters located in Stamford, CT.
Statements in this news release that are not historical are to be regarded as forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties with respect to the Company’s business include general economic conditions, weather conditions, changing beverage consumption trends, pricing, and the availability of raw materials and economic uncertainties, including currency.
We Build Brands™
©2003 Leading Brands, Inc.
This news release is available at www.LBIX.com
