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May 16, 2002

USA: Bravo! Foods sees increase in Q1 sales

Florida-based brand marketing company Bravo! Foods International Corp has announced gross sales of US$248,221 for its Q1 ended 31 March 2002, up from US$172,091 year on year. Bravo!, which holds the Looney Tunes license from Warner Bros to manufacture, promote and distribute branded flavoured milk, saw its US business grow 19% during the quarter to US$221,845. Gross sales in China and Mexico fell short of its internal plan by US$67,000, however, due to the timing of product and kit sales in China and a three-month delay in introducing product in 200 Wal-Mart stores in Mexico. As of today, the company said that sales in both countries are back on track.

Florida-based brand marketing company Bravo! Foods International Corp has announced gross sales of US$248,221 for its Q1 ended 31 March 2002, up from US$172,091 year on year.

Bravo!, which holds the Looney Tunes license from Warner Bros to manufacture, promote and distribute branded flavoured milk, saw its US business grow 19% during the quarter to US$221,845. Gross sales in China and Mexico fell short of its internal plan by US$67,000, however, due to the timing of product and kit sales in China and a three-month delay in introducing product in 200 Wal-Mart stores in Mexico. As of today, the company said that sales in both countries are back on track.

Bravo! reported a Q1 net loss of US$485,220 before preferred stock dividends and non-cash charges or US$0.03 per share, a decrease of US$786,000, or 62%, from the previous year Q1 level of US$1.27m, or US$0.096 per share. The net loss applicable to common stockholders after preferred stock dividends and non-cash charges was US$762,000 or US$0.05 per share for the current quarter, as compared to a net loss of US$1.3m or US$0.10 per share in the Q1 2001. The company took a one-time non-cash charge of US$236,764 as a result of “deemed dividends” associated with the issuance of its preferred series H in Q1 2002.

The company said that it pressed on with the implementation of its new business model in Q1, focusing on branding, marketing, packaging design and the promotion of its flavoured fresh milk products using the Looney Tunes characters. During the Q1, it announced its agreement with Jasper Products, a producer and distributer of protein based nutritional beverages, to produce and distribute its extended shelf life products to Publix Supermarket’s 696 stores. More recently, the company announced its distribution arrangement with Winn-Dixie’s supermarket chain of 1,174 stores.

The company also recently reported a relationship with Pan American Food Brokers, a manufacturers representatives/sales agent of grocery, dairy and frozen items to the retail food industry.

“We are highly encouraged by the reception Bravo! Foods products have received by supermarket chains, nationwide. Our goal was to be in 25% of US supermarkets by June, and we have already beaten that schedule by one month,” said CEO Roy Warren: “We have now adjusted our goal upward to place our products in 50% of supermarkets within the next six months. To help achieve our targets, our marketing team is aggressively pursuing opportunities to quickly establish our product branding.”

John McCormack, president and COO added: “We also focused on cost containment during the quarter, as we push closer toward profitability. We are steadfast on achieving this near-term goal. Our improved business model leads to higher gross margins. Retaining control of sales and marketing has enabled us to more effectively plan product introductions and maximise market penetration. The launch of our extended shelf life products has provided further impetus to our distribution successes.”

Company guidance

Bravo! said that it anticipates that during 2002, it will achieve cash-flow break even by Q3 and exit the year clearly in the black. By the Q4, its plan calls for US$0.02 earnings per share and revenues in the range of US$1m to US$1.2m. Moving into 2003, the company its momentum continuing to build at 20% sequential revenue growth rate off the Q4 2002 base.

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