2008 Revenue Up 55% From Prior Year
2008 Dispensed Products Revenue Up 95%
Forecasts 16,000 to 18,000 Beverage Dispensing Locations by Year End
SAN DIEGO, Feb. 24, 2009 (GLOBE NEWSWIRE) -- Javo(r) Beverage Company, Inc. (OTCBB:JAVO), a leading provider of premium dispensable coffee and tea beverages to the food service industry, today released a review of fiscal year 2008 and presented its outlook for the 2009. The Company ended 2008 with revenue increasing 55% to approximately $19.5 million and a customer base of 10,084 foodservice dispensing locations. The Company enters 2009 with an approximate annual run-rate of $35 million based on current customer dispensing locations and its existing non-dispensed products revenue. Management anticipates continued strong demand for new installations of its high quality, cost-saving beverage systems, especially in the healthcare and convenience store sectors of the foodservice market. The Company expects to report its full results for the year ending December 31, 2008 on or before March 16, 2009. Highlights for 2008 and its outlook for 2009 follow:
Highlights from 2008:
* Total revenue was approximately $19.5 million, an increase of 55% over 2007. * Revenue from dispensed products grew dramatically in 2008 to $15.7 million, up 95% vs. the prior year. * The Company ended the year with 10,084 foodservice dispensing locations, an increase of 5,779 or 134%, from the close of 2007. Each dispenser is expected to generate from $2,500 to $6,000 in annual revenue. * Gross margin expanded by more than 1,000 basis points to approximately 42% as the Company improved its operations with the integration of several beverage manufacturing processes, including roasting, thermal processing and packaging. * Javo built on its relationship with 7-Eleven, the world-wide convenience retailing leader, by growing the number of locations and geographic markets serving iced coffees and lattes. Javo shipments of iced coffee to locations where the program has been in place for more than one year were up strongly in 2008. * Javo executed a chain-wide roll-out of its iced coffee program to Speedway SuperAmerica, a leading Mid-west retailer that operates 1,600 convenience locations. * The Company completed development of and began the initial stages of a specialty iced latte expansion with BP Products North America, operators of more than 1,200 ampm(r) and BP(r) convenience stores. Javo also added to its number of dispensing locations with other national and regional convenience store chains such as: Exxon-Mobil (On the Run(r) stores), Sunoco, Conoco and others. * Javo added a record number of new locations serving Javo dispensed coffee products under its Preferred Supplier program with contract feeder Compass Group. Through company-owned members such as Morrison Management, Eurest, Bon Appetit, Chartwells College and University Dining, Restaurant Associates and Creative Host Services, Compass Group provides food, vending and related services at thousands of locations. * The Company completed its first year as a Prime Vendor to the U.S. Department of Veterans Affairs, converting approximately half of the major VA facilities nationwide to Javo dispensed coffee. * For Premier, Inc., the largest healthcare purchasing organization in the U.S., Javo added hundreds of new foodservice coffee locations. Through its agreement with Premier, Javo is approved to sell its dispensed coffee programs at more than 50,000 facilities in the U.S. * Javo completed new purchase agreements to sell and install beverage dispensing programs with HPS, a network of more than 2,000 major healthcare facilities across the country and Creative Dining Services, a contract operator specializing in contract restaurant services at colleges and universities. * Javo installed numerous hot coffee dispensing systems during its first full year as an approved supplier to MedAssets Supply Chain Systems, a food and beverage purchasing organization with nearly 32,000 healthcare facilities nationwide. * After nearly doubling the size of its direct sales force and adding over 50 distribution centers stocking the Company's products during 2008, Javo is well positioned to capitalize on national opportunities with existing and new foodservice customers.
Outlook for 2009:
* In January 2009, the Company raised approximately $3.5 million through the sale of senior subordinated promissory notes and shares of common stock. The Company expects to use these offering proceeds to pay down its existing senior convertible promissory notes issued in December 2006 and to redeem certain warrants related to this transaction. Proceeds may also be used to fund operations, including the purchase of dispensing equipment. * Management believes that market and economic conditions favor continued expansion of the Company's beverage programs in that they offer industry restaurants and institutions the ability to capture incremental specialty beverage sales and reduce costs through the elimination of waste. The Company anticipates growing its number of beverage dispensing locations from 10,084 at the close of 2008, to 16,000 - 18,000 by close of 2009. * An important part of the growth in 2009 will come from the expansion and continued roll-out of dispensed beverage programs at new locations with its current foodservice chain customers including: 7-Eleven, BP Products North America (ampm and BP stores), Sunoco, Exxon-Mobil and others. * Javo expects to double its dispensed foodservice beverage locations at facilities within a growing group of national purchasing organizations into which the Company has gained access, including: Compass Group, Premier, Department of Veterans Affairs, MedAssets Supply Chain Systems, Amerinet, HPS, Creative Dining Services and others. * Javo will add to its opportunities with convenience retailers and broaden its appeal to casual dining and quick service restaurants with the introduction of six concentrated fresh brewed iced tea beverages that may be dispensed from cold drink equipment supplied by the Company or hand mixed into traditional tea urns. * The Company begins 2009 with an enhanced lineup of dispensed hot coffee blends for foodservice operators, including Espresso Roast, a darker coffee house-style brew, and Rainforest Blend, a coffee formulated to provide valuable "green" benefits for its customers.
Cody C. Ashwell, Javo's Chairman and CEO, said, "Javo begins 2009 better positioned than ever before. The breadth of the Company's product line, reach of its foodservice distribution, scope of its direct national sales force, scale of manufacturing operations and strength of our customer relationships are stronger than ever and have provided a great deal of positive momentum to start this year. Our customer base at the close of 2008 has created a broad footprint of more than 10,000 recurring revenue locations and a $35 million annual run rate entering this year. With the recent capital improvements to our Vista facility we expect to comfortably exceed the product margins achieved in 2008."
He concluded, "With regard to the current economic downturn, we have not seen a fundamental weakening in the demand by foodservice operators to add coffee and tea products to their beverage menus. In fact, customers in the convenience and institutional foodservice markets see the current conditions as an opportunity to attract coffee drinkers from relatively more expensive coffee shops to their locations. Bottom line, we remain confident about our business prospects for 2009 and we expect that the overwhelming preference for our beverage programs compared to competitors, as well as the impressive size of our opportunities with current customers will overcome a challenging economic climate. This will allow Javo to grow its installed beverage dispensing locations to 16,000 - 18,000 by the close of 2009, giving the Company continued growth going forward."
About Javo(r) Beverage Company, Inc.
Based in Vista, California, Javo(r) Beverage Company (OTCBB: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. As a result, they have 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 with the development and supply of customized ingredients for their packaged foods and ready-to-drink beverages. Through its sales, service and distribution operations, Javo(r) supplies a growing list of national and international food service operations, specialty coffee retailers, restaurant chains and food manufacturers. More information about Javo Beverage Company is available at www.javobeverage.com.
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This release contains forward-looking statements made by or on behalf of Javo(r) Beverage Company, Inc. All statements, which address operating performance that the Company expects will occur in the future, including statements relating to volume growth, share of sales, revenue per dispenser location, annualized revenue rates, relationships with distribution partners, or statements expressing general optimism about future operating results, are forward-looking statements. These forward-looking statements are based on management's current views and we cannot assure that anticipated results will be achieved. We expressly disclaim any intent to update forward looking statements to reflect subsequent developments.