Message #9 From:
NewsBot Date: June 8, 2008 06:48:19 AM
Javo Beverage Company Revenue up 41% in Record First Quarter
Company Adds Record 2,096 Dispensing Locations, Total Now at 6,401
Gross Margin Increases to 38.0% Following Integration of Key
Manufacturing Operations
Javo® Beverage Company, Inc. (OTC BB:
JAVO stock), a leading provider of premium dispensable coffee and tea-based
beverages to the food service industry, announced today its financial
results for the first quarter of 2008.
Financial highlights for the quarter ended March 31, 2008 include:
Revenues increased 41% to $3.9 million from $2.7 million in the first
quarter 2007.
Gross profit for the recent quarter was approximately $1.5 million, up
34% over year ago.
Javo deployed a record 2,096 new dispensers during the quarter,
increasing its total installed customer base to 6,401, up 48% versus
the prior quarter and 241% versus year ago.
The Company added 27 new food service distribution centers and is on
track to more than double its distributor network this year.
Dispensed products revenue reached $2.5 million, up 90% over first
quarter 2007.
Cody C. Ashwell, Chairman and CEO of Javo Beverage Company, said, “We
made important progress during the quarter in revenue generation and
flow through to gross margin. As anticipated, we expanded our base of
dispensing locations, especially within national account customers. We
were also pleased with the gross margin improvement led by our
operations team. The integration of coffee roasting, thermal processing
and certain packaging operations into the brewing facility in Vista
resulted in a 530 basis point improvement in gross margin for first
quarter when compared to the average margin achieved during 2007. This
positive margin trend is expected to continue as the year develops and
production levels rise.
Ashwell continued, “Reflected in our financial
results is the ramp-up of our national selling and marketing effort that
we undertook in 2007. As a result of having acquired the direct sales
force, promotional capability and equipment service network to address
customer opportunities in all regions of the country, Javo continues to
win important national and regional account business and is on track
this year to achieve 8,800 dispensing locations by mid-year. Each new
location adds between $3,000 and $6,000 of product revenue on an annual
basis. This investment is evident in the 84% increase in sales and
marketing expenses in first quarter 2008 compared with first quarter
2007. We expect that growth in selling and marketing expenses will
moderate during the remainder of the year.
Ashwell said, “Similarly, general and
administrative expenses were scaled during 2007 to prepare for an
elevation in business activity. First quarter general and administrative
expenses were $825,000 higher than in the year ago period. The increase
was due to the expansion of our staff; increases in costs for legal
services; higher expenses for auditors, internal controls and (SOX)
compliance; and expanded insurance coverage, the total of which
accounted for roughly $320,000 of the increase. Non-cash expense for
options grants accounted for an additional $362,000. We expect to see
the pace of administrative costs to slow significantly in 2008. In fact,
this category of expenses was down $80,000 compared with the final
quarter of 2007. Importantly, while EBITDA was ($672,310) for the
quarter, based on our current installed customer base and anticipated
dispenser placements, Javo will have positive cash flow from operations
for 2008.
Ashwell concluded, “We recorded a $1.8 million
net loss for the first quarter versus a net profit of $409 thousand in
the same quarter of 2007. The difference is primarily attributable to
reduced non-cash income from derivatives of $1.2 million, a non-cash
expense for options of $362 thousand, increased depreciation expense of
$179 thousand and planned increases in sales and marketing expenses.”
Gary Lillian, President of Javo Beverage Company, said, “First
quarter was a period of high activity in terms of sales and equipment
installations, especially with national convenience store chains that
have become important users of our iced coffee and tea concentrates. Our
program with 7-Eleven was an important contributor to the first quarter
performance as we assisted with the installation of more than 500 new
iced coffee stores in the Western United States. In addition, we
executed against the initial expansion of important new iced coffee
programs with Exxon-Mobil (On-the-Run®), BP
Products (am pm®) as well as several other
large regional chains. The food service distribution built during the
quarter was meaningful and will be an important facilitator of revenue
growth as we enter peak seasonality for our dispensed iced coffee
program.
We were also pleased with the rate of hot on-demand coffee program
conversions achieved by our sales force with Premier Healthcare, the
Department of Veterans Affairs, Compass Group, Amerinet and MedAssets
Supply Chain Systems.”
Management of Javo Beverage will host a conference call today, April 24,
2008 at 11:00 a.m. EDT to discuss the company’s
financial results and achievements. Those who wish to participate in the
conference call may telephone (888) 335-6674 from the U.S. or (973)
321-1100 for international callers, conference ID# 44427337
approximately 15 minutes before the call. A digital replay will be
available by telephone, approximately 2 hours after the completion of
the call, for 30 days and may be accessed by dialing (800) 642-1687,
from the U.S., or (706) 645-9291, for international callers, conference
ID# 44427337.
About Javo® Beverage Company, Inc.
Based in Vista, California, Javo® Beverage
Company (OTC Bulletin Board: JAVO) is an innovator and leader in the
manufacture of coffee and tea-based dispensed beverages, drink mixes and
flavor systems. The company has successfully commercialized a
proprietary brewing technology that yields fresh brewed coffees and teas
that are flavorful, concentrated and stable, with broad applications in
the food service, food manufacturing and beverage industries. For food
service operators, Javo makes it possible to serve great tasting hot
coffees and cold specialty coffee beverages from convenient
dispenser-based systems. Javo also assists food and beverage processors
seeking authentic and robust coffee and tea flavors through its
development and supply of customized ingredients for packaged foods and
ready-to-drink beverages. The company supplies a growing list of
national and international food service operations, specialty coffee
retailers, restaurant chains and food manufacturers. For information
about Javo Beverage Company, please visit www.javobeverage.com.
