DENVER, June 17, 2014 (GLOBE NEWSWIRE) -- Marley Coffee (OTCQB:JAMN) (www.marleycoffee.com), the sustainably grown, ethically farmed and artisan-roasted reports fiscal first quarter sales increased 153 percent compared with last year's comparable sales.
Commenting on the results for fiscal first quarter 2015, Brent Toevs, Chief Executive Officer of Marley Coffee, said, "First quarter results were in line with our expectations, as we continued to implement our objectives for the year. The key highlight of the quarter was our strategic agreement and capital raise with Mother Parkers, which we believe is an integral growth catalyst for us in the upcoming year and beyond. Subsequent to the end of the quarter, we have spent time integrating with the Mother Parkers team to help leverage its resources to drive Marley Coffee sales. Our focus during the quarter was on continuing to implement effective marketing campaigns to help increase our velocity of turning products off the shelf, expanding distribution to key retailers and increasing the talent at Marley Coffee as we complete our team."
Mr. Toevs added, "We believe we've successfully executed on our objectives, and our quarterly numbers reflect our continued focus. We remain confident in our ability to substantially increase our sales this year and reach our goal of more than $10 million in gross revenues and have identified a clear path to attain $25 million in the near future."
Financial Highlights for the Fiscal First Quarter Ended April 30, 2014
Sales revenue for the fiscal quarter ended April 30, 2014 increased 153 percent to $2.1 million compared with $846 thousand in the year-ago quarter.
Cost of sales for the quarter were $1.7 million compared with $318 thousand last year, primarily attributable to increased sales.
Gross profit was $453 thousand for the first quarter compared with gross profit of $499 thousand in the year-ago quarter. Gross profit margins were 21 percent compared with 59 percent in the year-ago quarter. The expected decrease in gross profit and gross profit margins was the result of our expansion into new markets and lower initial margins on sales. We expect gross profits to increase in upcoming quarters as we mature in our current grocery operations.
Selling and marketing expenses for the three months ended April 30, 2014 and 2013 were $823 thousand and $168 thousand, respectively, which represents an increase of $655 thousand or 389% from the prior period. The increase was principally the result of increased in-store demos and advertising to drive awareness and trial.
Total operating expenses (including selling and marketing expenses) for the first quarter increased to $2.7 million compared with $813 thousand in the year-ago quarter. Increased expenses reflected greater costs to support sales growth, as well as overall business expansion and professional fees.
Net loss for the first quarter was $1.9 million or a loss of $0.02 per share, compared with $419 thousand or $0.00 per share in the year-ago quarter.
Its cash position was $2.4 million as of April 30, 2014, compared with $857 thousand as of January 31, 2014.
Business Highlights for the First Quarter and Subsequent Events
Mother Parkers
On April 30, 2014, we announced the financing agreement with Mother Parkers. We are confident that this partnership with Mother Parkers and our emphasis on the RealCup single-serve platform reinforces our belief that this platform will be instrumental for our long-term growth. Subsequent to the end of the quarter, both organizations were expeditiously putting teams together to get ready for our anticipated fast growth. Mother Parkers is a world-class, multifaceted coffee organization with deep expertise in OCS, food service and grocery retail, and it is heavily vested in our success. With its knowledge and infrastructure, we can effectively deploy our resources more efficiently as we gear up for accelerated growth.
We are currently working with all of Mother Parkers' teams, specifically concentrating on best practices in grocery retail growth and cross-promotional marketing. We believe this unified approach to going to market will help the company effectively broaden its reach into new retailers.
Marketing
We have been executing on the marketing and promotional calendars we put in place in Q4 2014. Though gross margins are lower than previous year, this is part of the process to secure new accounts. We project improvements to our gross margins after our initial marketing spends. Promotions drive sales and repeat business, and we have experienced improved velocity rates in the first quarter compared with the fiscal fourth quarter 2014. Not only is there a lift in sales during each promotional period, but what's even more encouraging is the baseline lift after the products go off promotion, according to syndicated data from IRI or Nielsen.
Our largest account right now is Safeway and during promotion in the quarter, we saw a total brand average lift of 433 percent. Quarter-over quarter, between the fourth quarter and first quarter, velocity increase was 41 percent from IRI for all accounts that are tracked.
Expanding Distribution
We've expanded distribution into key national grocery stores such as Albertsons, as well as regionals such as Hannaford and Roche Brothers during the quarter. We continue to focus mainly on turning our products in our existing distribution, but will also continue pursuing chains we believe can complement the portfolios of stores we are selling into right now.
Mr. Toevs concluded, "The focus of the company last year was securing shelf space. Our success gaining authorization in more than 10,000 stores demonstrates our ability to sell the product to retailers. Fiscal 2015 will be focused on driving consumer trial and acceptance of Marley Coffee as one of the premier coffee brands. It is a transition point in the company's advancement from retailer to consumer, from expanding distribution to organic growth within our current retailers. We've shifted resources towards consumer marketing programs. We've invested in the manpower to service our growing business. Now, through our partnership with Mother Parkers, we have the shoulders of giants we can stand on to grow the company. Though grocery retail remains our focus, Mother Parkers' expertise in other retail areas, such as convenience and mass, may open up additional revenue opportunities in the quarters ahead."
"With the capital resources in place to help us achieve our initial revenue target of $15 - $20 million, we do not anticipate the need to raise additional capital, unless we believe it would dramatically accelerate our growth without shareholder dilution. Management's compensation has primarily been in the form of stock over the past 18 months, and in aggregate, the team is Marley Coffee's largest shareholder. We believe our interests are aligned with those of our other shareholders and have no intent to dilute shareholder ownership.
"We look forward to the year ahead with great anticipation and optimism."
About Jammin Java Corp., d/b/a Marley Coffee
Marley Coffee (corporate name Jammin Java Corp.) is a US-based company that provides premium, artisan roasted coffee to the grocery, retail, online, service, hospitality, office coffee service and big box store industry. Under its exclusive licensing agreement with 56 Hope Road, the company continues to develop its coffee lines under the Marley Coffee brand. The company is a fully reporting company quoted on the OTCQB under the symbol "JAMN". Learn more at www.MarleyCoffee.com or visit the Investor Relations section at Investor.MarleyCoffee.com.
Join us on Facebook at http://www.facebook.com/MarleyCoffee, or follow us on Twitter at http://twitter.com/marleycoffee, where we post information that's material and non-material about the company.
Forward-Looking Statement
This Press Release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Acts"). In particular, the words "believe," "may," "could," "should," "expect," "anticipate," "estimate," "project," "propose," "plan," "intend," and similar conditional words and expressions are intended to identify forward-looking statements and are subject to the safe harbor created by these Acts. Any statements made in this news release about an action, event or development, are forward-looking statements. Such statements are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. These risks and others are included from time to time in documents we file with the Securities and Exchange Commission ("SEC"), including but not limited to, our Form 10-Ks, Form 10-Qs and Form 8-Ks. Other unknown or unpredictable factors also could have material adverse effects on our future results. Accordingly, you should not place undue reliance on these forward-looking statements. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that its forward-looking statements will prove to be correct. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made as of the date hereof. The company takes no obligation to update or correct its own forward-looking statements, except as required by law or those prepared by third parties that are not paid by the company. The company's SEC filings are available at http://www.sec.gov.
-Financial Tables Follow-
| JAMMIN JAVA CORP. | ||
| CONDENSED BALANCE SHEETS | ||
| April 30, | January 31, | |
| 2014 | 2014 | |
| (Unaudited) | ||
| Assets | ||
| Current Assets: | ||
| Cash | $ 2,418,177 | $ 857,122 |
| Accounts receivable | 1,476,563 | 1,085,947 |
| Notes receivable - related party | 2,724 | 2,724 |
| Inventory | 114,988 | 354,932 |
| Prepaid expenses | 132,885 | 1,163,914 |
| Other current assets | 48,519 | 41,430 |
| Total Current Assets | 4,193,856 | 3,506,069 |
| Property and equipment, net | 430,646 | 440,194 |
| License agreement | 644,834 | 657,001 |
| Intangible assets | 46,277 | 47,525 |
| Other assets | 21,316 | 15,716 |
| Goodwill | 88,162 | 88,162 |
| Total Assets | $ 5,425,091 | $ 4,754,667 |
| Liabilities and Stockholders' Equity | ||
| Current Liabilities: | ||
| Accounts payable | $ 523,542 | $ 1,181,510 |
| Payable to Ironridge in common shares | -- | 369,589 |
| Accrued expenses | 106,711 | 123,856 |
| Accrued royalty and other expenses - related party | 212,566 | 219,799 |
| Notes payable | -- | 4,965 |
| Total Current Liabilities | 842,819 | 1,899,719 |
| Total Liabilities | 842,819 | 1,899,719 |
| Stockholders' Equity: | ||
| Common stock, $.001 par value, 5,112,861,525 shares authorized; 114,548,177 and 104,085,210 shares issued and outstanding, as of April 30, 2014 and January 31, 2014, respectively | 114,390 | 103,166 |
| Additional paid-in-capital | 20,143,919 | 16,514,630 |
| Accumulated deficit | (15,676,037) | (13,762,848) |
| Total Stockholders' Equity | 4,582,272 | 2,854,948 |
| Total Liabilities and Stockholders' Equity | $ 5,425,091 | $ 4,754,667 |
| JAMMIN JAVA CORP. | ||
| CONDENSED STATEMENTS OF OPERATIONS | ||
| (Unaudited) | ||
| Three Months Ended April 30, | ||
| 2014 | 2013 | |
| Revenue: | $ 2,141,037 | $ 846,181 |
| Discounts and allowances | (19,916) | (29,132) |
| Net revenue | 2,121,121 | 817,049 |
| Cost of sales: | ||
| Cost of sales products | 1,668,376 | 318,161 |
| Total cost of sales | 1,668,376 | 318,161 |
| Gross Profit | $ 452,745 | $ 498,888 |
| Operating Expenses: | ||
| Compensation and benefits | 1,132,148 | 275,157 |
| Selling and marketing | 822,773 | 168,243 |
| General and administrative | 780,600 | 369,772 |
| Total operating expenses | 2,735,521 | 813,172 |
| Other income (expense): | ||
| Other income (expense) | 370,024 | 3,135 |
| Interest income | -- | -- |
| Interest expense | (437) | (107,498) |
| Total other income (expense) | 369,587 | (104,363) |
| Net Loss | $ (1,913,189) | $ (418,647) |
| Net loss per share: | ||
| Basic and diluted loss per share | $ (0.02) | $ (0.00) |
| Weighted average common shares outstanding - basic and diluted | 106,390,682 | 83,903,387 |