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SPoT Coffee releases Q3 Interim Financial Statements and MD&A

Spot Coffee

TORONTO, Canada — SPoT Coffee has released its Q3 Interim Financial Statements along with its Management Discussion and Analysis (MD&A) for the period ending September 30, 2018. The MD&A speaks in greater detail of management’s impleme ntation of new cost savings measures and improvements to revenue-generating lines of business.

2018 has been SPoT Coffee’s busiest to date in terms of franchise growth, senior management organization and development, the implementation of cost-saving measures, and revenue generation.


Overall Performance Highlights

Net income purely from operations for the period of the Third Quarter of 2018 is $136,218.

Other key highlights from the statements for the 9-months ended September 30 period are:

  • The working capital of the Company rose by $891,218.
  • The total assets of the Company increased in value by $59,087, from $2,434,160 to 2,493,247.
  • The Company’s liabilities decreased by $613,491.
  • Initial efforts to reduce operating costs as part of the Company’s drive to reign in spending and allocate its resources more efficiently have resulted in a total savings of $103,809.
  • Ongoing debt reduction efforts undertaken by the Company’s management have resulted in an overall decrease of $46,080 in interest and accretion.
  • Long-term and convertible debentures were reduced by $373,334, from $1,926,666 to $1,553,332.
  • The Company achieved a positive company-wide EBITDA of $245,222 and $545,418 for the three and nine-month periods ended September 30, 2018 respectively.

Management feels it is important to note that these initial cost savings are representative of only the earliest phase of the Company’s cost savings and realignment process. Greater benefits from these cost saving measures will be even more evident in 2019.

Although additional operational cost savings will come primarily from continued reductions in labor costs and the cost of goods sold, the Company also remains firmly focused on reducing its debt further while opening more franchise café locations in order to attain its goal of 50 total corporate and franchise locations by the end of 2020.

SPoT’s improved financial profile can also be attributed to outsourcing more of its products to the highest quality suppliers. Furthermore, management has decided to embrace new ordering service applications and move to a modern cloud-based POS system.

Franchise Operations

SPoT is pleased to announce that its newest franchise café, SPoT West Seneca, will be open for business on December 20, 2018. This café will be the fifth completed franchise project this year.

The Company is pleased to announce that it has signed two new owner-operator franchises for the Greater Rochester Area and Greater Buffalo Area in the State of New York. SPoT has a list of prospective franchisees with whom it is negotiating and matching up with café locations that the Company’s research and real estate personnel are identifying as suitable.

More details on these negotiations and the target locations will be made available in the coming weeks.

The recent openings of new SPoT franchise cafés have prompted serious enquiries from regional supermarket chains interested in opening new SPoT Express cafés on site in their locations across New York State. The Company’s management is now in the process of studying the benefits and risks associated with this opportunity. An announcement will be made once the Company completes its study and arrives at a decision.