National Roll-out to Distribution Partner’s Entire Network Now Completed
Multiple National Account In-Market Test Launches Expected in Summer of 2016
First Quarter 2016 Revenue expected to be five times year ago quarter
BEVERLY HILLS, Calif., March 30, 2016 (GLOBE NEWSWIRE) — Barfresh Food Group, Inc. (OTCQB:BRFH), a manufacturer of frozen, ready-to-blend beverages, is providing an update on recent business developments. In addition, the Company is filing its form 10-K for the fiscal year ended December 31, 2015, with the SEC today.
Riccardo Delle Coste, the Company’s CEO stated, “The first quarter of 2016 has been very exciting with several key developments that position our company for significant growth, including substantial expansion of our manufacturing capabilities to service expected demand. Our partnership with PepsiCo North American Beverages is yielding the initial desired results and we’re impressed with the level of engagement by their organization. We are already realizing the benefits of their deep customer relationships which is accelerating timelines for new customers.”
Mr. Delle Coste continued, “In addition, our exclusive partnership with the nation’s leading food and beverage distributor continues to expand. We are proud to be selected to our distributor’s exclusive Cutting Edge Solutions platform. We are the sole beverage offering within this initiative which we believe highlights Barfresh’s on-trend position as a better-for-you alternative in the beverage category, while also providing food service operators with a delivery system that ensures profitable growth through the use of our products. This has instantaneously raised our profile considerably with their sales team and also served as the catalyst that quickly moved our products into all 72 of the company’s regional distribution locations nationwide.”
Business Highlights
- We have nearly doubled our penetration of our distributor’s network directly as a result of our inclusion in their Cutting Edge Solutions platform. Since the last business update in November, we’ve increased our presence from 38 distribution locations to all 72 distribution locations nationally. We are the only beverage offered as part of this initiative, where Barfresh represents 5 of the total 15 SKUs that are featured. In preparation for the launch of the Cutting Edge Solutions initiative this month, our sales teams met with and demonstrated product for the distributor sales teams across their entire organization. The reception was tremendous, generating leads of several thousand potential accounts.
- Since our last company update, we introduced our product and engaged with the entire PepsiCo sales team, aligning their sales force of about 1,000 people with our Barfresh sales team. The reaction from PepsiCo has been outstanding. Our sales force is now fully integrated with the PepsiCo team, which is generating sales leads and participating in customer demonstrations on a daily basis.
- After years of work including market research, consumer surveys, flavor selection, product development, consumer focus groups, operational testing, and many revisions and approvals, we are excited to announce that a number of national accounts are entering the final stages. The Company expects to roll out multiple regional in-market tests of our products in a number of key national accounts beginning this summer.
- We have significantly increased our manufacturing capacity, with the signing in February 2016 of an agreement with Yarnell Operations, LLC, a subsidiary of Schulze and Burch. The Yarnell facility is located in Arkansas, and will provide us with up to 100 million units of annual manufacturing capacity, enabling us to meet demand growth. We expect production at this facility to begin during April 2016. At the same time, we have implemented an improved logistics platform, by integrating our third party forward warehouse arrangements with those of our distribution partner.
- For the nine month period ended December 31, 2015, sales were $437,000, an increase of 177% from the year ago nine month period ended December 31, 2014. As a reminder, we changed our financial year-end from March 31st to December 31st, so our reported financial results in the 10-K for this transitional year will reflect an abbreviated nine month period. The year-end results did not yet reflect two key developments: our new partnership with PepsiCo, which was launched on October 28th, or our national distributor roll-out, which occurred earlier this month. Our preliminary first quarter 2016 sales ended March 31 are expected to exceed $300,000, more than five times the year ago quarter, which is beginning to reflect the positive impact of both PepsiCo and our national distributor roll-out.
The Company’s President, Joe Cugine said, “Having recently completed our sales force hiring and training process, the Barfresh sales organization is now fully staffed, with our entire team on board for our distributor marketing initiative tied to the national product roll-out. This completes our efforts to align with 100% of our partner’s distribution outlets in the US, encompassing over 8,000 sales representatives nationally. In just the last week, we demonstrated and sampled products with all of the sales people at our partner’s distribution centers around the country. Our combined efforts have generated thousands of qualified sales leads. This immediate success speaks to the commitment our partner is making to align our respective interests, which include video marketing, senior level benchmarking of engagement, and sales incentives across the entire organization.”
Joseph Tesoriero, the Company’s CFO, added, “Our team has made great strides over the past several months establishing the necessary operational elements required by some of the large accounts. We diversified our manufacturing base both in number and geography when just last month we added Yarnell’s capabilities to manufacture up to an additional 100 million units annually out of their Arkansas facility. We expect to start production at Yarnell’s in the coming weeks. Moreover, we have implemented an enhanced level of integration with our distribution partner, by utilizing common forward warehousing partners to improve service to regional distribution centers. Together, these operational improvements set us on a path to maximize margin as unit volumes increase. Finally, we successfully raised a total of $5.9M of equity capital which closed February 29th, solidifying Barfresh’s balance sheet and allowing us the flexibility to make the necessary investments in people and production assets. We are extremely pleased with our start to 2016 and look ahead to a more pronounced acceleration in revenues in the coming quarters.”
Conference Call
The conference call to discuss these results is scheduled for today Wednesday, March 30, 2016, at 1:30 pm Pacific Time (4:30 pm Eastern Time). Listeners may dial (877) 407-9039 in North America, and international listeners can dial (201) 689-8470. Participants from the Company will be Riccardo Delle Coste, Founder and CEO, Joseph Cugine, President, and Joseph Tesoriero, CFO.
A telephonic playback will be available approximately two hours after the call concludes and will be available through Wednesday, April 13, 2016. Listeners in North America can dial (877) 870-5176, and international listeners can dial (858) 384-5517. Passcode is 13633403.
During the call, the Company will reference its investor presentation, which will be posted on the Investors portion of the Company’s website www.barfresh.com.
About Barfresh Food Group
Barfresh Food Group, Inc. (OTCQB:BRFH) is a developer, manufacturer and distributor of ready-to-blend beverages, including smoothies, shakes and frappes, primarily for restaurant chains and the foodservice industry. The company’s proprietary, U.S. patent-pending system uses portion-controlled pre-packaged beverage ingredients that deliver freshly made frozen beverages that are quick, cost efficient, better for you and without waste. PepsiCo North America Beverages, a division of PepsiCo, Inc., is the exclusive sales representative in North America within the food service channel for Barfresh’s full line of beverages. Barfresh has an exclusive distribution partnership with the leading food distributor in North America. For more information, please visit www.barfresh.com.
Forward Looking Statements
Except for historical information herein, matters set forth in this press release are forward-looking within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including statements about the Company’s commercial progress and future financial performance. These forward-looking statements are identified by the use of words such as “grow”, “expand”, “anticipate”, “intend”, “estimate”, “believe”, “expect”, “plan”, “should”, “hypothetical”, “potential”, “forecast” and “project”, among others. All statements, other than statements of historical fact, included in the press release that address activities, events or developments that the Company believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors the Company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company and may not materialize. Investors are cautioned that any such statements are not guarantees of future performance. The contents of this release should be considered in conjunction with the warnings, risk factors and cautionary statements contained in the Company’s recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10K and Quarterly Report on Form 10Q. Furthermore, the Company does not intend, and is not obligated, to update publicly any forward-looking statements, except as required by law.
CONTACT: Contact John Mills ICR 646-277-1254 John.Mills@icrinc.com Jeff Sonnek ICR 646-277-1263 Jeff.Sonnek@icrinc.com
Source: Retail