Fresh Healthy Vending International, Inc. Issues Shareholder Update Letter
SAN DIEGO, CA - Marketwired - Aug 27, 2015) - Fresh Healthy Vending International, Inc. (OTCQB: VEND) ("FHV") announced that the Company has issued a letter to shareholders to provide an update on the Company's recent progress, financial performance, and growth strategy.
Fresh Healthy Vending is making tremendous progress as we head into a new fiscal year, and I wanted to take this opportunity to update you on our accomplishments and growth strategy.
We believe the market opportunity before us is very large, and in a relatively short period of time we have become the leader in the healthy vending category. Fresh now has over 220 franchisees operating in 44 states. We've launched a unique, new micro market product that is being well received, we have significantly enhanced our management team, and we are delivering improved financial results. We are focused on moving forward intelligently and aggressively to build market share and drive sustained returns for you, our shareholders.
A Large and Under-Penetrated Market Overview
As you likely know, Fresh Healthy Vending pioneered the concept of vending machines stocked with fresh, healthy snack options and we are capitalizing on a rapidly growing market of health conscious consumers. Vending is a $20.2 billion industry in the U.S., with about 1.5 million junk food machines throughout the nation. By contrast, we believe there are approximately 30,000 healthy vending machines, creating a major disparity between the supply and demand for healthier on-the-go food options. Fresh Healthy Vending is closing this gap.
We have all seen and heard reports of obesity rates that are currently at an all-time high. To begin to combat these concerning obesity statistics, Americans have reduced average caloric intake by about 100 calories compared to peak intake in 2004, a tangible sign that health awareness initiatives have begun to take hold. Nonetheless, the percentage of overweight Americans remains staggering.
There are multiple initiatives that have been instituted to curb the epidemic, chief among them being Smart Snacks in School. Starting in the 2014-15 school year, all foods sold at school during the school day will need to meet nutrition standards. The Smart Snacks in School regulation applies to foods sold a la carte, in the school store, and in vending machines. Prior to the publishing of the Smart Snacks rule, 39 states already had nutrition standards in place. (See http://www.fns.usda.gov/healthierschoolday/tools-schools-focusing-smart-snacks.) Some of these standards include statements like "must be a 'whole grain-rich' grain product," "100% fruit or vegetable juice with no added sweeteners," and guidelines for maximum amounts of calories, fat, sodium and sugar.
This creates a considerable opportunity for Fresh, as our vending machines offer a solution for schools needing to comply with this Act. We are seeing considerable interest from this market sector. Likewise, our machines provide a healthy alternative in corporate break rooms, hotels, hospital cafeterias, community centers and health club facilities for consumers looking for lower calorie, more nutritional snacks.
Improved Financial Performance
Our success penetrating the market is translating into improving financial performance, with revenue growth, improving margins and a reduced net loss. Fresh has over 220 franchises in 44 states with over 2,800 vending machines and micro markets. In addition, Fresh owns 50 micro markets and 15 vending machines that it operates in San Diego.
For the third fiscal quarter of 2015, we achieved 63.5% year over year revenue growth. Our results can vary from quarter to quarter, therefore, we believe it's helpful to also look at some of our financial metrics on a trailing nine-month basis.
During June 2015, we announced our single largest franchise sale to date, to a customer in South Carolina who purchased 58 units for a total price of $556,250. Including that accomplishment, Fresh finished June with $1,274,750 in total franchise bookings and 98 new franchisee and corporate locations procured. For the fourth quarter, we sold a total of 279 franchised units, representing the highest amount of quarterly units sold in company history.
Recently Announced ADA Partnership
Partnerships are critical to ensure the broadest adoption of our product. We recently entered into a partnership with the American Diabetes Association (ADA) as part of the organization's "Wellness Lives Here" campaign, which provides solutions to inspire healthy living habits. This partnership is an invaluable endorsement from one of the leading health organizations in the country. The pairing allows Fresh to offer its turnkey solution to health-minded companies and organizations through the ADA's wide-ranging relationships. The national program is compatible with our scalable business model and will allow us to break into previously untapped markets.
We're pleased to have this opportunity to work with the ADA and will continue to pursue other partnerships of this type.
Additional Contributors To Our Growth
Micro Market Growth
Our state-of-the art micro markets with fully customizable, proprietary software and design, are the only offering of their kind, boasting a full range of healthy snacks and meals. All of our micro markets are company-owned, and have significantly higher margins than vending machines. We rolled out our first micro markets in February 2015, and are seeing considerable interest in this product from hotels, corporations and other high-traffic entities.
Enhanced Procurement Team
Our financial results have been improving, but as a company we need to do a better job securing locations for our vending machines and we need to do it quicker. We are seeing heightened interest from franchisees as well as consumers, so we're focused on ensuring that we keep up with the demand and get machines in place. To that end, we recently reorganized our procurement team, which has already improved our ability to secure locations, leading to faster installations and revenue recognition. In July we secured 119 new locations for our franchisees the highest total amount secured in over 18 months.
International Expansion Initiative
Toward the end of 2014, we initiated a program to develop our franchise network outside of North America. Specifically, we are working to identify and contract with master franchisors and joint venture partners to expand our offerings worldwide by leveraging our scalable existing network to drive additional value and take advantage of global health trends.
This is a very exciting time for our Company. As a fellow shareholder, my goal is to position Fresh Healthy Vending for long term, sustained growth. We are focused on scaling the business to capitalize on the tremendous market opportunity to create value for our franchisees, our partners and our shareholders and I'm pleased with the progress we've made.
Thank you for your continued support, I look forward to communicating our future achievements and progress.
Chairman & Founder
About Fresh Healthy Vending
Fresh Healthy Vending, based in San Diego, California, is North America's leading healthy vending franchisor. Fresh Healthy Vending pioneered the concept of vending machines stocked with tried-and-tested fresh, healthy snack options and capitalizes on a growing market of health conscious consumers. The Company has over 220 active franchisees throughout the United States, Canada, Puerto Rico and the Bahamas, and continually looks to partner with like-minded entrepreneurs who share its vision.
The Company has booked over 2,800 machines for placement in schools, universities, hospitals, community centers, military bases, airports, fitness facilities, YMCAs, libraries and many other locations.
Cautionary note on forward-looking statements
Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events that are based on management's belief, as well as assumptions made by, and information currently available to, management. While the Company believes that expectations are based upon reasonable assumptions, there can be no assurances that goals, results and strategy will be realized. Numerous factors, including risks and uncertainties, terms and availability of financing, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. In addition to statements, which explicitly describe risks and uncertainties, readers are urged to consider statements labeled with such terms as "believes," "belief," "expects," "intends," "feels," "anticipates," "proposes," "proposed," or "plans" to be uncertain and forward-looking. More detailed information on these and additional factors that could affect Fresh Healthy Vending's actual results are described in Fresh Healthy Vending's filings with the Securities and Exchange Commission, including its most recent Forms 10-Q for the quarterly periods ended March 31, 2015, December 31, 2014, September 30, 2014 and its annual report on Form 10-K for the fiscal year ended June 30, 2014. All forward-looking statements in this news release speak only as of the date of this news release and are based on Fresh Healthy Vending's current beliefs and expectations. Fresh Healthy Vending undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE Fresh Healthy Vending
Fresh Healthy Vending International, Inc.
John Nesbett | Jennifer Belodeau
Institutional Marketing Services (IMS)