Marley Coffee’s Revenue Increases 27 Percent in Fiscal Second Quarter 2015
Marley Coffee 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”.
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
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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.
