Replies to post #6802 on Jammin Java Corp (JAMN)

[Tmoney1102]

Just FYI. Eco Cups will be compatible with K 2.0.

DENVER, Aug. 25, 2014 (GLOBE NEWSWIRE) -- Marley Coffee (JAMN) (www.marleycoffee.com), the sustainably grown, ethically farmed and artisan-roasted gourmet coffee company, announces that its single-serve coffee partner and investor, Mother Parkers Tea & Coffee, will launch a new version of the Marley Coffee RealCup(TM) capsule that will be compatible with the future Keurig Green Mountain K2.0 brewer, reported to launch later this year. The compatibility technology will then also be integrated into the EcoCup(TM) format for Marley Coffee, which will utilize a recyclable capsule that is accepted by many curbside recycling programs.

[Brophtron]

OK; here is where I'll disagree with you.

I just wanted to point out that neither company showed growth when looked at on a quarterly basis, but both had significant growth when looked at on a yearly basis.

Right, but Starbucks shows growth without suddenly having 10 times the locations they had a year ago. Now that JAMN isn't adding stores at the same rate, the growth in revenues has stopped.

>Positives:
>Strategic Partnership with Mother Parkers

I know you'll say that I'm "turning a positive into a negative", but it's not so much as a "strategic partership" as it is simply that JAMN doesn't do their own roasting and packaging and need to hire another company to do it for them. If JAMN did their own roasting and packaging (yes, there would be up-front costs), they would have smaller costs in the long-term.

>The “Marley” name is a strong global brand

Music and headphones - yes, obviously. The headphones aren't as well known as Beats, but there is some recognition.
The "energy" drink - yes; there were some public figures on the sales a while back and the numbers are quite good.
The coffee - not so much. If you ask 10 people randomly on the street about Marley Coffee, I doubt you'd get a single person who would know about the brand.

>Excellent annual growth rate

Again - they had growth when they were adding stores (JAMN recognizes revenue when they ship product - not when the customer buys it off the shelf. The did a great job in 2013 in getting product on the shelf, but I simply don't think that customers are buying.

>Eco Cup technology

In theory great, but it's really not going to matter to the consumer. K-cups are incredibly wasteful; the people who use them care more about their coffee than the environment (at least for their coffee consumption). I would be amazed if a single person actually bought a brand of coffee just because the box said "eco" on it.

>Strategic Partnership with “Sparkling Drink System” and “Bevyz”

I can honestly say that I never heard of those brands outside of JAMN press releases. I've never seen the products on the shelf; I have no idea how I would order them; I have no idea how I'd put Marley Coffee into them or how I would order the refills.

>Potential to open coffee shops with Jammin Java branding

That will be tough because they can't use the Marley name for the stores themselves. There are already coffee shops called Jammin Java, so there may be lawsuits on that front. And since they're out of cash, there's no way for them to afford to open the shops. Sure, there is franchising, but that will draw away the profit of having the shops in the first place.

>Negatives:
>They are out of cash again - need a cash infusion

And with the reduced share price, that's going to be a problem; they can't take too much from a single investor, and they risk making Mother Parkers unhappy by giving more shares for less money that what MP did for their deal.

>Customer acquisition cost is too high -
>need a more cost effective way to grow sales

This is one of the reasons I think Toevs was the wrong man for the job of CEO. His forte was office coffee service.

>Gross Profit margin needs to be higher

And this is one of the biggest problems they have - since they don't do their own roasting and packaging, plus the fact that they're beholden to MP, JAMN has pretty much no control over their gross profit margin.

>Dilution or debt depending on how they raise capital

They tried debt 3 years ago; they couldn't afford it (the terms were terrible) and that's what led to the Ironridge deal. Dilution is a problem these days because of the reduced share price

>Eco Cup is not compatible with Keurig 2.0

True, but I do wonder how quickly people will switch to Keurig 2.0; I don't think it's a compelling reason for people to buy a new machine; most people just use what works.

The next quarterly report will need to show $2.5 million or higher to have a shot at making their $10 million target.

They need closer to $3 million for the next 2 quarters (remember that the last 2 Q4s actually showed less revenue than the Q3 for those years). JAMN will probably hit $2 million for Q3, but I think Q4, where they true-up the entries for all the make-goods and allowances for the year will be a problem like last year. But then again, we won't see those reports for 5 months!