Results Driven by Increased Distribution to Grocery Chains Throughout U.S. and Breaking Into the Top 10 Brands in the Natural/Organic Coffee Category
On Track to Achieve $10 Million in Revenue for Fiscal 2015
DENVER, Sept. 16, 2014 (GLOBE NEWSWIRE) -- Marley Coffee (OTCQB:JAMN) (www.marleycoffee.com), the sustainably grown, ethically farmed and artisan-roasted gourmet coffee company, reports fiscal second quarter sales increased 27 percent compared with last year's comparable sales, and 62.6 percent for the fiscal six month period. This resulted in the Company becoming one of the Top 10 brands in the natural/organic coffee category and the number one in terms of growth in the category at 1,582 percent versus previous 52 weeks according to SPINSscan Conventional syndicated data (52 weeks ending July 13, 2014).
"I am very proud of the ongoing accomplishments of our Company this quarter," stated Rohan Marley, Chairman and Founder of Marley Coffee. "Our aspirations are to be a global company, not just a North American company, and we have been building the infrastructure and our brand to back this. Our mission continues to be to sell the best-tasting and most sustainable coffee to people around the world."
Commenting on the results for fiscal second quarter 2015, Brent Toevs, Chief Executive Officer of Marley Coffee, said, "We are continuing to successfully execute on the business plan we outlined at the beginning of the year, growing our revenue quarter over quarter to $2.1 million from $1.6 million in the second fiscal quarter 2014. This quarter, we continued our initiative to place our products on more key shelves in American and Canadian grocery chains. At the same time, our new relationships with several U.S. and Canadian athletic teams has expanded our visibility among sports fans, while the development of RealCup™ capsules for the Keurig Green Mountain K2.0 brewer and our new agreement with Bevyz, manufacturer of the world's only multi-drink system, reflect our ongoing technological innovations.
"I am also pleased to note that as we continue to develop and expand our retail channels, including grocery, online, office coffee services, food service and licensing channels, we are also enthusiastic about our emphasis on sustainability, as well as protecting the environment with our EcoCup™ initiative. As we strive to achieve a leadership position in the gourmet coffee space, we are also capitalizing on the strength and recognition of the Marley name, as well as the high quality of our products."
Financial Highlights for the Fiscal Second Quarter and Six Months Ended July 31, 2014
Sales revenue for the fiscal second quarter ended July 31, 2014 increased 27.1 percent to $2.1 million compared with $1.6 million in the year-ago quarter. For the six-month period, sales revenue increased 62.6 percent to $4.2 million compared with $2.6 million in the year-ago six months. These increases were the result of the Company's continued expansion into the retail grocery market and growth of its other business verticals.
Cost of sales for the second quarter was $1.6 million compared with $1.1 million last year. For the six-month period, cost of sales was $3.3 million compared with $1.5 million in the prior year period. The increases in both the quarter and six-month periods were primarily attributable to increased sales.
Gross profit was $495 thousand for the second quarter compared with gross profit of $472 thousand in the year-ago quarter. For the six-month period, gross profit was $947 thousand, compared with $971 thousand in the year-ago six months. Gross profit margins for the second quarter were 23.8 percent compared with 28.9 percent in the year-ago quarter. For the six-month period, gross profit margins were 22.4 percent compared with 37.4 percent in the year-ago six-month period. The expected decrease in gross profit margins was the result of the Company's expansion into new markets and lower initial margins on sales. The Company continues to expect gross profits to increase in upcoming quarters as it matures in its current grocery operations.
Selling and marketing expenses for the 2015 second quarter were $887 thousand compared with $38 thousand in the year-ago quarter. For the six-month 2015 period, selling and marketing expenses were $1.7 million compared with $124 thousand in 2014. The increases in the second quarter were principally the result of additional advertising campaigns to support expansion in new markets. The Company expects these costs to increase throughout the remainder of the fiscal year as it strives to expand its customer base and build out the Marley Coffee brand.
Total operating expenses (including selling and marketing expenses) for the second quarter increased to $2.7 million compared with $867 thousand in the year-ago quarter. For the six-month periods these expenses were $5.4 million compared with $1.7 million in the year-ago six-month period. Increased expenses reflected greater costs to support sales growth, as well as overall business expansion and professional fees.
Net loss for the second quarter 2015 was $3.0 million or a loss of $0.03 per share, compared with a net loss of $715 thousand or $0.01 per share in the year-ago second quarter. For the six month period, net loss was $4.9 million, or $0.04 per share, compared with a net loss of $1.1 million or $0.01 per share in the year-ago period.
Its cash position was $1.1 million as of July 31, 2014, compared with $857 thousand as of January 31, 2014.
Business Highlights for the Second Quarter and Subsequent Events
The Company established new distribution agreements in the U.S. with several grocery chains, including Wegman's Food Markets, Jewel-Osco and Albertsons, as well as Brookshire, Hannaford, Tops Fresh Market, Green Acres Market and Roche Brothers. Meanwhile, in Canada, three major grocery chains, Loblaw, Safeway and Longos, have signed on to carry Marley Coffee RealCups®.
Through its endeavors, the Company was able to donate $25,721 to its Waterwise Coffee charity within the quarter. This money directly helps more than 25,000 families in the Sidamo region of Ethiopia where it procures its coffee.
It also secured distribution deals with TD Place in Ottawa, Canada—home of the Ottawa REDBLACKS CFL football team, the Ottawa 67's OHL ice hockey team and the Ottawa Fury FC NASL soccer team—as well as the University of Colorado Buffaloes football and basketball teams and the Colorado Rapids soccer team.
Marley Coffee also continues to benefit from its ongoing relationship with its single-serve coffee partner and investor, Mother Parkers Tea & Coffee, which plans to launch a new version of the Marley Coffee RealCup™ capsule that will be compatible with the future Keurig Green Mountain K2.0 brewer, reported to launch later this year. The compatibility technology will then also be integrated into the EcoCup™ format for Marley Coffee, which will utilize a recyclable capsule that is accepted by many curbside recycling programs. It also added new business channels by signing an agreement with Bevyz, manufacturer of the world's only multi-drink system, to produce Marley Coffee hot, cold and sparkling capsules for the Bevyz system. This represents a tremendous opportunity for Marley Coffee to promote its brand across multiple platforms.
The Company also appointed its first two members to its Board of Advisors, which, it expects to expand. Michael Higgins, Co-CEO of Mother Parkers Tea & Coffee and Anthony Schiano, Principal at Business Solutions International, will be providing strategic guidance, independent advice and recommendations to the Marley Coffee Board of Directors regarding the organization, fundraising, plan of operations, proposed joint ventures and partnerships, governance, marketing and expansion of the Company and its products and services.
The Marley brand continues to garner high visibility in the popular media. Bob Marley's classic compilation album, Legend, held the number five spot on the Billboard Top 200 list during the week of September 20, 2014. Meanwhile, Rohan Marley has been featured in both Sports Illustrated and in Forbes.
Mr. Toevs said, "This quarter, we have successfully broken into the Top 10 brands in the natural/organic coffee category. Driven by the highest growth in the category (1,582 percent versus previous 52 weeks), Marley Coffee moved up 10 spots to the #9 brand of natural/organic coffees according to SPINSscan Conventional syndicated data (52 weeks ending July 13, 2014). The brand currently holds the #8 position when only considering the company's second quarter period. This phenomenal growth is the result of a balance between increases in breadth of distribution, depth of distribution and velocity off the shelf. Over the past 52 weeks, Marley Coffee has seen a 729 percent increase in Total Distribution Points as more and more retailers realize the value that the brand brings to their category. This is the largest rate of expansion of any brand in the category."
Mr. Toevs added, "Marley Coffee is also experiencing the second highest increase in the number of items sold in the category compared with last year, an increase of 5 percent. The organic growth of the brand items within existing retailers is a critical aspect to fulfilling the company's growth plans. Most importantly, the brand's velocity (Dollar Sales per Point of Distribution) has doubled since September 2013. This critical measurement clearly shows consumer acceptance of Marley Coffee."
Mr. Toevs concluded, "We are very pleased with the brand's progress to date. Both retailers and consumers are just starting to learn about the quality of our coffees and our mission. We expect to see revenues continue to increase over the next two quarters, and we see a clear path to $10 million in revenue this fiscal year.
"We are extremely encouraged by the interests from consumers and retailers for Q1 of next year, to whom we've shown our EcoCup platform. We believe EcoCups are going to be a category expander and game changer. By creating a recyclable RealCup, we believe we can bring new consumers to the platform. Retailers love this, and the data show that consumers care more and more about brands that are sustainable, particularly in the single-serve coffee category. This is a 10-billion-cup space that's going to grow year after year. We compete against about 20 percent of the market with respect to price and a diverse range of offerings. The data show that, all things being equal, consumers are going to gravitate toward a brand and sustainability. We believe we are primed to disrupt the market, and gain market share next year with what we feel is a clearly delineated and superior product. A one percent market share in the space is about $45M in revenue just for one division.
"We believe we have invested well in our brand and marketing efforts over the past quarter and full year, and we are now benefiting from those investment decisions. Marley Coffee, along with the other Marley-branded companies, is collectively building its brand and movement as never before."
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. Actual results may differ from anticipated results sometimes materially, and reported results should not be considered an indication of future performance. 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 | ||
| July 31, | January 31, | |
| 2014 | 2014 | |
| (Unaudited) | ||
| Assets | ||
| Current Assets: | ||
| Cash | $ 1,147,404 | $ 857,122 |
| Accounts receivable | 1,672,270 | 1,085,947 |
| Notes receivable - related party | 2,724 | 2,724 |
| Inventory | 45,468 | 354,932 |
| Prepaid expenses | 128,946 | 1,163,914 |
| Other current assets | 66,256 | 41,430 |
| Total Current Assets | 3,063,068 | 3,506,069 |
| Property and equipment, net | 416,156 | 440,194 |
| License agreement | 632,667 | 657,001 |
| Intangible assets | 45,030 | 47,525 |
| Other assets | 23,566 | 15,716 |
| Goodwill | 88,162 | 88,162 |
| Total Assets | $ 4,268,649 | $ 4,754,667 |
| Liabilities and Stockholders' Equity | ||
| Current Liabilities: | ||
| Accounts payable | $ 751,400 | $ 1,181,510 |
| Payable to Ironridge in common shares | 820,164 | 369,589 |
| Accrued expenses | 419,657 | 123,856 |
| Accrued royalty and other expenses - related party | 117,425 | 219,799 |
| Notes payable | -- | 4,965 |
| Total Current Liabilities | 2,108,646 | 1,899,719 |
| Total Liabilities | 2,108,646 | 1,899,719 |
| Stockholders' Equity: | ||
| Common stock, $.001 par value, 5,112,861,525 shares authorized; 114,917,821 and 104,085,210 shares issued and outstanding, as of July 31, 2014 and January 31, 2014, respectively | 114,760 | 103,166 |
| Additional paid-in-capital | 20,736,366 | 16,514,630 |
| Accumulated deficit | (18,691,123) | (13,762,848) |
| Total Stockholders' Equity | 2,160,003 | 2,854,948 |
| Total Liabilities and Stockholders' Equity | $ 4,268,649 | $ 4,754,667 |
| JAMMIN JAVA CORP. | ||||
| CONDENSED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
| Three Months Ended July 31, | Six Months Ended July 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Revenue: | $ 2,078,746 | $ 1,634,570 | $ 4,219,783 | $ 2,595,931 |
| Discounts and allowances | (344) | (29,132) | (20,260) | (173,444) |
| Net revenue | 2,078,402 | 1,605,438 | 4,199,523 | 2,422,487 |
| Cost of sales: | ||||
| Cost of sales products | 1,583,243 | 1,133,359 | 3,251,619 | 1,451,520 |
| Total cost of sales | 1,583,243 | 1,133,359 | 3,251,619 | 1,451,520 |
| Gross Profit | 495,159 | 472,079 | 947,904 | 970,967 |
| Operating Expenses: | ||||
| Compensation and benefits | 1,047,086 | 411,996 | 2,179,234 | 687,153 |
| Selling and marketing | 887,465 | 37,719 | 1,710,238 | 123,932 |
| General and administrative | 760,046 | 416,946 | 1,540,646 | 868,748 |
| Total operating expenses | 2,694,597 | 866,661 | 5,430,118 | 1,679,833 |
| Other income (expense): | ||||
| Other income (expense) | (815,963) | (319,321) | (445,939) | (316,186) |
| Interest expense | 315 | (1,176) | (122) | (108,674) |
| Total other income (expense) | (815,648) | (320,497) | (446,061) | (424,860) |
| Net Loss | $ (3,015,086) | $ (715,079) | $ (4,928,275) | $ (1,133,726) |
| Net loss per share: | ||||
| Basic and diluted loss per share | $ (0.03) | $ (0.01) | $ (0.04) | $ (0.01) |
| Weighted average common shares outstanding - basic and diluted | 117,348,177 | 90,108,517 | 113,388,829 | 85,413,315 |