Marley Coffee reports financial results for the three and nine months ended Oct. 31, 2013 and 2012, including increases in revenue, gross profit and gross profit margins, for the year-over-year periods.
Revenue for the 2014 third fiscal quarter (i.e., the three months ended Oct. 31, 2013) increased 309 percent to $2.2 million vs. $536,000 compared with fiscal 3Q 2013. For the nine-month period ended Oct. 31, 2013, revenue increased 228 percent to $4.6 million compared with $1.4 million in the year-ago nine-month period.
The company increased grocery retailer penetration to 8,000 authorized locations as of Oct. 31, 2013, compared with 500 locations at the end of the third quarter last year helped contribute to the growth in revenue.
Gross profit increased to $811,000 in the 2014 third fiscal quarter compared with $153,000 in the year-ago third fiscal quarter. For the nine months ended Oct. 31, 2013, gross profit was $1.8 million compared with $295,000 in the year-ago nine-month period.
Gross profit margins increased to 37 percent in the third quarter of fiscal 2014 from 29 percent in the year-ago third fiscal quarter.
Operating expenses for the third fiscal quarter 2014 were $1.5 million compared with $1.0 million in the year-ago third fiscal quarter, and $3.1 million for the nine months ended Oct. 31, 2013 compared with $3.0 million in the year-ago nine-month period. While operating expenses increased by 50 percent, revenues increased by 309 percent highlighting the company’s ability to scale well.
Net loss was $1.4 million or $0.01 per share for the third fiscal quarter of 2014, compared with a net loss of $945,000, or $0.01 per share, in the year-ago third fiscal quarter. Oct. 31, 2013 was a non-cash loss on extinguishment of debt of $684,000 and $1.1 million, respectively and non-cash equity compensation of $601,000 and $1.6 million, respectively. That loss on extinguishment of debt was specifically due to the financing transaction by Ironridge. The losses relate to a non-cash true up of certain amounts due to Ironridge under the July 2013 transaction and represent the value of shares of common stock issuable to satisfy certain liabilities previously purchased by Ironridge. Moreover, excluding these non-cash transactions, net loss for the three months ending Oct. 31, 2013 would have been $93,000 or $0.00 per share and net income for the nine-month period would have been $200,000 or $0.00 per share.
Cash flows from operations improved from a net cash burn of $998,000 for the nine months ending Oct. 31, 2012 to a positive net cash flow of $990,000 for the nine months ending Oct. 31, 2013. The positive cash flow was due to the significant increase in revenues during the period, in addition to the use of equity financing to pay down and manage debt. The company believes that this decrease in debt will help minimize the risk for any current and potential investors, and plans to transition from equity-based compensation to cash compensation for the management team during the fiscal year ending Jan. 31, 2015.
Generated distribution with several leading supermarket chains and retail outlets including Giant Food Stores, Stop & Shop, Natural Grocers by Vitamin Cottage®, AKiN's Natural Food Markets, Chamberlin's Market & Cafe, Richard's Foodporium, Market District, Vitamin Discount Center, Hen House Market, Ball's Price Chopper and Brookshire Brothers, were added during the fiscal third quarter.
Rohan Marley, founder and chairman of Marley Coffee, said in a prepared statement, "The progress during this quarter was a result of our company's dedication and vision for Marley Coffee. As we continue to grow our business and introduce more and more customers to our unique blends, we also intend to remain true to our ideals—including sustainability, environmental awareness and community-based responsibility—that truly sets Marley Coffee apart as a coffee company."
Brent Toevs, chief executive officer of Marley Coffee, added, "As we increase our presence in traditional retail markets, we also continue to concentrate on expanding our domestic and international distribution channels. We believe there are many exciting opportunities for us to increase sales of our products, and the recognition of the Marley Coffee brand."