Javo Beverage Company, Inc. (OTCBB:JAVO – News), a provider of dispensable coffee and tea-based beverages to the foodservice industry, announced its unaudited financial results for the second quarter of 2008.
Financial highlights for the quarter ended June 30, 2008 include:
* Revenues increased 109 percent to $6.7 million from $3.2 million in the second quarter 2007.
* Gross profit margin expanded to 49.0 percent, an increase of 1,800 basis points from the year ago period and 1,100 basis points from the prior quarter.
* The company’s total installed base of beverage dispensers reached 8,826, an increase of 2,425 from the prior quarter and 6,215 more than year ago.
* Dispensed products revenue reached $5.9 million, up 189 percent over second quarter 2007.
* Selling, general, and administrative expenses totaled $3.8 million, an increase of 21 percent. Excluding non-cash expenses for depreciation and amortization, SG&A was $3.0 million, an increase of 11% on the same basis versus year ago.
* The company had a net loss of $2.2 million compared to a loss of $5.7 million in the prior year quarter. The loss from operations was $0.6 million, compared to a loss of $2.2 million in the second quarter of 2007. The net loss from operations for the second quarter includes non-cash option expense of $0.4 million and non-cash depreciation and amortization expenses of $0.4 million, resulting in a positive EBITDA for the quarter.
Cody C. Ashwell, chairman and CEO of Javo Beverage Company, says, “Javo’s second quarter results put us squarely on target with respect to our 2008 business plan and were important because of the key milestones achieved in dispenser placements, gross revenue, and gross profit margins.”
He adds, “With the recent integration of coffee roasting, thermal processing, and packaging operations at our brewing facility in Vista, Javo achieved a record gross margin of 49 percent during the quarter, an increase of 18 percentage points over year ago. We anticipate that the combination of Javo’s higher revenue level and improved unit costs will allow us to maintain comparable levels of gross margin performance in the future.”
Ashwell concludes, “We recorded a $2.2 million net loss for the second quarter versus a loss of $5.7 million in the same quarter of 2007. The difference is primarily attributable to an increase in gross profit of $2.3 million, reduced non-cash income from derivatives of $1.7 million, combined with an increase in total operating expenses of $0.7 million.”
Gary Lillian, president of Javo Beverage Company, says, “Javo added a record 2,425 dispensing locations for the company’s on-demand beverages, bringing our total to 8,826. To an important degree, our performance was positively impacted by the decision of Speedway SuperAmerica LLC (SSA), the largest company-owned and –operated gasoline and convenience retailer in the Midwest, to add Javo’s ice coffees and lattes to its beverage program.” He adds, “During the quarter, we worked closely with Speedway to install beverage dispensers in most of its 1,600 retail locations. Our quarter further benefited from the continued expansion of our iced coffee program with other national accounts such as: Sunoco, Exxon-Mobil (On-the-Run), BP Products (am pm), and others … our primary growth driver for the remainder of the year will be hot coffee customers. Based on current visibility, we see beating our high end objective of 10,000 dispensers by year end, with each new location adding between $3,000 and $6,000 of product revenue on an annual basis.”
Management of Javo Beverage will host a conference call today July 30, 2008, at 11:00 a.m. EDT to discuss the company’s financial results and achievements.
