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Javo Beverage Company, Inc. Reports Jump in First Quarter Revenue and Gross Profit

Other Topics: Coffee Emission Monitoring, Healthy Coffee Drinking, Coffee Challenge, Coffee Licensing Package

Business Wire
May 10, 2007

San Diego, CA -- Javo Beverage Company, Inc. (OTC BB: JAVO), a leading provider of coffee- and tea-based beverages to the food service industry, today announced its financial results for the quarter ended March 31, 2007.

Financial highlights for the first quarter 2007 include:
  • Revenues increased 18% from 1Q 2006 to $2.7 million
  • Gross profits increased 33% from a year ago to $1.1 million
  • EPS reaches $0.01 per share versus a $0.01 per share loss in 1Q 2006

Cody C. Ashwell, CEO and Chairman of Javo Beverage Company said, "The Company made important progress during the quarter with several of our key food service customers and completed operational improvements that will support expansion of the enterprise over the remainder of the year. The increase in revenues and gross profits demonstrate the Company's growing reputation and distribution strength in the national foodservice industry. Over the last year, we have proven our ability to sell and service large national chain customers such as 7-Eleven and others. As these chain operators move our coffee and tea programs to new geography within their store network, there is the opportunity for significant growth in revenues."

Ashwell added, "The first quarter also reflects the momentum of a strong year and fourth quarter in 2006 where revenues rose 67% and 72%, respectively. We are committed to continuing to broaden our distribution footprint and building shareholder value through financial discipline."

The Company reported revenues of $2,748,205, up 18% from $2,337,493 in the first quarter 2006. The increase in revenue was driven by additional dispenser placements of Javo's coffee and tea beverages at food service locations throughout the United States. The Company added 819 revenue generating dispensers versus the same period last year. Gross profits increased to $1,105,089, up 33% from $829,343 a year ago. Selling and marketing expenses rose to $757,672 in the first quarter, from $382,905 in the first quarter a year ago. This increase reflects management's commitment to building Javo Beverage's national sales force and the intensifying its national distribution capabilities.

The Company reported net income for the first quarter 2007 of $409,473, or $0.01 per share, compared to a net loss of $1,153,963, or ($0.01) per share a year ago. The difference was primarily due to the recording of non-cash derivative income and increased interest income.

Ashwell also said, "Iced coffee beverages are growing dramatically in prominence as convenience stores and quick service restaurants add these options to their beverage menus. Javo has the best dispenser-based iced coffee solution available and we expect significant growth in our revenue as we expand to additional convenience oriented locations. Chilled beverages like iced coffee and tea tend to be seasonal with sales concentrated in the spring and summer when the weather is warmest. Our hot dispensed coffee business is counter-seasonal, with its peak in the fall and winter months."

Ashwell added, "Javo's coffee concentrates and beverages are the optimal solution for food service operators needing to prepare high volumes of coffee or who are challenged by the high waste associated with traditional on-site brewing. Javo's on-demand coffee system eliminates the chores of grinding, loading, batch brewing and holding coffee. Our products cater to America's increasingly sophisticated taste in coffee while making it easy and economical for the retail operator to produce the perfect cup each and every time."

In 2007, the Company intends to significantly increase its number of food service distributor customers and to deepen its relationship with current customers such as: Sysco Food Services, US Foodservice, Shamrock Foods, Gordon Food Service, Core-mark International and McLane Company. To achieve this, Ashwell said, "We have already added substantially to our staff of sales professionals in the first quarter of 2007 and by the end of the year we will have a force with the reach to effectively sell and service all regions of the country."

About Javo(R) Beverage Company, Inc.
Based in Vista, California, Javo Beverage Company (OTC Bulletin Board: JAVO), is an innovator and leader in the manufacture of coffee and tea-based dispensed beverages, drink mixes and flavor systems. The Company has successfully commercialized a proprietary brewing technology that yields fresh brewed coffees and teas that are flavorful, concentrated and stable. As a result, they have broad applications in the foodservice, food manufacturing and beverage industries. For foodservice operators, Javo makes it possible to serve great tasting hot coffees and cold specialty coffee beverages from convenient dispenser-based systems. Javo also assists food and beverage processors seeking authentic and robust coffee and tea flavors with the development and supply of customized ingredients for their packaged foods and ready-to-drink beverages. Through its sales, service and distribution operations, Javo supplies a growing list of national and international foodservice operations, specialty coffee retailers, restaurant chains and food manufacturers. More information about Javo Beverage Company is available at www.javobeverage.com.

This release contains forward-looking statements made by or on behalf of Javo Beverage Company, Inc. All statements, which address operating performance that the Company expects, will occur in the future, including statements relating to volume growth, share of sales, or statements expressing general optimism about future operating results, are forward-looking statements. These forward-looking statements are based on management's current views and we cannot assure that anticipated results will be achieved.

 

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