SPoT Coffee (Canada) Ltd.
TSX VENTURE : SPP

SPoT Coffee (Canada) Ltd.

August 13, 2012 16:57 ET

SPoT Coffee Fiscal Second Quarter 2012 Results: 25% Increase in Sales & 24% Increase in Gross Profit

TORONTO, ONTARIO--(Marketwire - Aug. 13, 2012) - SPOT COFFEE (CANADA) LTD. (TSX VENTURE:SPP) ("SPoT" or the "Company") released its financial results for the Company's fiscal second quarter ended June 30, 2012. Complete financial statements and Management's Discussion and Analysis have been filed for public review at www.sedar.com and are available on the Company's website at www.spotcoffee.com. All dollar values expressed in Canadian dollars unless otherwise stated.

Fiscal Second Quarter 2012 Highlights

  • Reported revenue increase of 25% to $1,752,947
  • System-wide revenue increase of 29% to $1,991,520
  • Gross profit increase of 24% to $1,137,926
  • Same-store-sales of seasoned cafés increase of 13.2%
  • Gross margins remained steady at 65%
  • SPoT began development of its 11th café

SPoT Benefited From the Following Key Factors Over the Past Quarter

  1. Growth in same-store sales
  2. Positive impact of new café openings
  3. Cost reductions and increased purchasing power
  4. Operational efficiencies and synergies
  5. Increased community awareness due to greater involvement

Q3 & Q4 2012 Targets

SPoT Coffee is pleased to announce its fiscal Q3 and Q4 operational targets as follows:

  • Opening of three new corporate cafés
  • Development of the second Florida café under SPoT Coffee's first regional licensing transaction. (Lease already structured and construction to commence shortly)

SPoT has identified new corporate locations consistent with SPoT's location and demographic criteria and is continuing to strategically grow across Western New York and Southern Ontario. The Company's previously announced 8th, 9th, 10th and 11th corporate cafés are under construction and are expected to open as follows: 8th & 9th café to open September 2012, 10th café to open in December 2012 and 11th café to open Q1 2013.

Commenting on the second quarter results, SPoT Coffee President, Anton Ayoub commented, "We are benefiting from continued enhancements to the overall SPoT Coffee portfolio of cafés and continue to focus on both the expansion of new cafés as well as the optimization of the current portfolio. The existing portfolio of cafés continues to mature and show outstanding results, allowing us to move aggressively forward with the construction of new cafés and regional licensing transactions. We are extremely close to generating free cash flow at the corporate level and are excited to get closer to achieving corporate profitability."

Q2 Financial Highlights

  • Reported revenue for the fiscal second quarter increased 25% to $1,752,947 from $1,406,198 when compared to the same quarter of 2011. For the quarter ended June 30, 2012, SPoT's system-wide sales revenue (without elimination for any café operating partnerships) was $1,991,520, which represents an increase of 29% compared to the system-wide sales revenue of $1,550,137 for the same quarter of 2011.
  • Gross profit (measured as revenue less cost of sales) increased 24% to $1,137,926 from $917,457 when compared to the same quarter of 2011. SPoT's gross margin percentage (measured as gross profit over revenue) came in at 65% of revenue for the fiscal second quarter 2012.
  • Costs of sales were $615,021 as compared to $488,741 for the same quarter of 2011 as the Company continues to expand its footprint in the northeastern region of North America.
  • For the fiscal second quarter 2012, SPoT reported a negative EBITDA of $11,007. The Company's consolidated net loss increased to $272,613 from a loss of $11,358 for the same quarter of 2011. The increase to the Company's consolidated net loss for the fiscal second quarter 2012 is in line with the overall expansion of SPoT's operations and was driven by new café costs and non-cash expenses.

ABOUT SPOT COFFEE

SPoT Coffee trades on the TSX Venture Exchange under the symbol SPP. SPoT designs, builds and operates community oriented cafés that provides its customers with the highest quality service, signature made-to order meals and the world's finest in-house roasted gourmet coffee. Each SPoT café is distinctively designed to meet the uniqueness of the local neighborhood, creating a warm and friendly gathering place for the community. SPoT's commercial business focuses on retail stores, business accounts and third party resellers such as universities and hospitals.

Forward Looking Statements

Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Except as required by applicable securities requirements, the Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the release.

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