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SPoT Coffee Year End 2011 Results: Reports 29% Increase to Gross Profit and 16% Sales Increase

TORONTO, ONTARIO -- (Marketwire) -- 04/27/12 -- SPOT COFFEE (CANADA) LTD. (TSX VENTURE:SPP) ("SPoT" or the "Company") released its financial results for the Company's fiscal year ending December 31, 2011. Complete audited financial statements and Management's Discussion and Analysis have been filed for public review at www.sedar.com and are available on the Company's website at www.spotcoffee.com.

All dollar values expressed in Canadian dollars unless otherwise stated.

Year End 2011 Highlights

--  Gross profit (measured as revenue less cost of sales) increased 29% to
    $3,810,269 from $2,946,153 when compared to the same period of 2010.
    SPoT's gross margin percentage (measured as gross profit over revenue)
    increased to 67% of revenue for the year ended 2011 and represents an
    11% increase in the Company's gross margin percentage over the same
    quarter of 2010 which was 60% of revenue. 
    
--  Reported revenue increased 16% to $5,697,288 million from $4,904,740
    million when compared to the same period of 2010. For the 2011 year-end,
    SPoT's system-wide sales revenue (without elimination for any cafe
    operating partnerships) was approximately $6.4 million. For SPoT cafes
    open for two years or longer, the same-store sales increased from 2010
    to 2011 by an average of 7.6% for each of these cafes. The Company
    operated seven cafes during this quarter including SPoT Hertel which
    opened for business only in late November 2011. 
    
--  Cost of sales decreased 4% to $1,887,019 as compared to $1,958,587 for
    the same period of 2010 as the Company continues to benefit from
    increasing economies of scale, ordering and waste management
    efficiencies. 
    
--  SPoT uses Earnings Before Interest, Taxes, Depreciation and Amortization
    ("EBITDA") as a measurement of the Company's internal operating
    performance and a closer indication of cash earnings. For the 2011 year-
    end, SPoT's EBITDA significantly improved by 72% from a negative EBITDA
    of $291,364 in 2010 to a negative EBITDA of $81,451. The Company's
    consolidated net loss increased to $992,282 from a loss of $707,835 for
    the same period of 2010. The increase to the Company's consolidated net
    loss for the year ending 2011 is in line with the overall expansion of
    SPoT's operations and include an increase driven by new cafe costs and
    to certain centralized corporate overhead costs, including non-cash
    expenses reflecting option issuance to key management, directors and
    employees of the Company, as SPoT invests into its expansion platform. 

Commenting on the gross profit and sales increase, SPoT Coffee President, Anton Ayoub commented, "We have achieved major improvements to the financial operation of our cafes. For 2011, our average SPoT cafe sales exceeded the $1.0 million mark while average cafe costs have been noticeably reduced. Each cafe is contributing a return to the head office allowing us to move aggressively forward with the construction of new cafes and enabling us to move closer to generating targeted profit."

SPoT benefited from the following key factors over the year:

1.  Strength of same-store sales growth. For SPoT cafes open for two years
    or longer, the average annual same-store sales increase from 2010 to
    2011 was 7.6% for each of these cafes. SPoT is focused on further
    integrating and engaging in the communities that surround the cafes by
    working with local festivals and events to implement promotions and
    continuing to increase overall brand awareness. Throughout the year,
    SPoT implemented various marketing and branding initiatives and is
    focusing on growing and developing its social media platform in order to
    further increase the SPoT brand. 
    
2.  Growth through new cafes. SPoT announced the opening of the SPoT Hertel
    cafe in late November of 2011 which is centrally located in an historic
    North Buffalo community on Hertel Avenue. This cafe (owned 60% by SPoT)
    as well as the first full year of operations for SPoT Delray Beach
    (owned 49% by SPoT) have contributed to an overall increase in sales. 
    
3.  Growth through commercial accounts. During 2011, SPoT focused on growing
    and expanding its commercial account business through increasing the
    wholesale distribution of its coffee and sales to local businesses and
    institutions. SPoT expects to have its new roasting facility operational
    during June 2012 which will create more roasting capacity and allow SPoT
    to further expand this area of business. 
    
4.  Cost reductions. Over the course of 2011, SPoT has significantly
    narrowed its vendor base and put agreements in place with existing
    vendors to maximize cost control on all purchases and further take
    advantage of SPoT's increasing economies of scale. An improved cafe
    waste management process has enabled cafe managers to gain a more real-
    time understanding of waste costs and allowed them to implement
    procedures to minimize cost. Additionally, SPoT has continued to focus
    on efficiently utilizing labor and reducing overall labor expense where
    appropriate through a structured tracking system that allows the
    identification of the optimal labor needed to support operations as well
    as support a more streamlined scheduling process. SPoT also worked with
    its energy suppliers in order to better manage its energy costs and
    actively reduce monthly bills. 

SPoT has identified new locations consistent with SPoT's location and demographic criteria and is continuing to strategically grow across Western New York and Southern Ontario. The Company's recently provided an update on its current cafes under construction, SPoT Concord Park Place in North York, Toronto, and SPoT Transit Road in Buffalo, which are both expected to open for business in the summer of this year. SPoT also announced that it will be receiving possession of its new cafe location in Saratoga Springs in July of this year at which time construction will commence immediately with a target date for completion in early fall.

About SPoT

SPoT (www.spotcoffee.com) designs, builds and operates community-oriented cafes that provide its customers from every lifestyle and culture with the highest quality service, signature light meals and in-house roasted gourmet coffee. The current SPoT management team and directors have been successfully operating company-owned cafes since 2004.

Each SPoT cafe is a popular and friendly gathering place for its community where specialty coffee, upscale beverages, fresh baked goods, signature sandwiches, soups, salads and gourmet pizza, cakes, pastries and home baked goods are offered and enjoyed by its patrons in a warm, friendly and home-like environment.

The Company currently operates seven cafes that range in size from 2,000 to in excess of 4,000 sq. ft. with three more cafes currently under development. SPoT is currently evaluating several locations as part of its North American expansion.

Unlike other conventional gourmet coffee houses and quick service restaurants that are built on uniformity of product and style, each SPoT cafe maintains several unique and key features, including:

--  Dedication to create a friendly environment that nourishes and
    intensifies a sense of gathering and of community; 
    
--  In-house roasting and blending SPoT's own award-winning premium Arabica
    coffee; 
    
--  Unwavering commitment to offer the customers of the Company the highest
    quality products and services; 
    
--  Innovative and varying cafe designs that consider both the culture and
    flavor of the specific communities of each cafe; 
    
--  Choice of corner locations for each SPoT cafe at the center of their
    neighborhoods; 
    
--  Ability to offer intimate and warm ambiances in each cafe to suit the
    social and private moods of SPoT's patrons; and 
    
--  Trained and dynamic service staff that are proud to call themselves
    "SPoTters" who enjoy serving their customers and make them feel at home.

Forward Looking Statements

Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Except as required by applicable securities requirements, the Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the release.

Contacts:
SPoT Coffee (Canada) Ltd.
Lindsay Cross
Investor Relations Manager
(416) 368-2220
[email protected]
www.spotcoffee.com

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