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Javo(R) Beverage Company Achieves Positive Net Cash Flow From Operating Activities in the First Quarter; Hot and Cold Coffee Products Combine to Produce Surging Revenue

Posted on: Thursday, 11 May 2006, 18:01 CDT

Javo Beverage Company, Inc. (OTCBB:JAVO) - a leading provider of coffee and tea-based beverages to the foodservice industry -- today announced financial results for the first quarter of fiscal year 2006, which ended March 31st.

Total revenue for the first quarter increased 133.0% to $ 2,337,473 compared to $ 1,003,113 in the same quarter for 2005. Sales advances were strong for each of the Company's three business segments: dispensed coffee and tea, packaged flavors and bulk ingredient sales.

Gross profit for the quarter increased 157.1% to $ 830,204 compared to $ 322,868 a year ago. Gross margin expanded 340 basis points to 35.5% versus 32.1% in the same quarter last year due primarily to purchasing and operating efficiencies gained at the higher sales level.

"Increased revenue during the quarter provided greater leverage of our fixed expenses," said Richard Gartrell, Javo's Chief Financial Officer. "Operating expenses declined 37.3 percentage points to 49.0 percent for the quarter compared to last year."

The company recorded net positive cash flow from operating activities during the first quarter of $ 125,694 compared to negative cash flow of $ 967,356 in the prior year.

"Each installation we do creates a valuable customer relationship for us," said Cody Ashwell, Javo Chairman and CEO. "We provide critical equipment and service to our customers in exchange for a reliable stream of dispensed coffee and tea product sales for Javo." He added that Javo had 810 more installed locations during the quarter when compared to the same period last year.

About Javo(R) Beverage Company, Inc.

Based in Vista, California, Javo Beverage Company (OTC Bulletin Board: JAVO), is the innovation 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 selling, 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.

Source: Business Wire

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