Javo Beverage Company, Inc. (JAVO.OB), a rapidly growing producer of coffee and tea based dispensed beverages, drink mixes, and flavorings, today announced a dramatic increase in annual sales for 2008, with revenues jumping 55%, to $19.5 million, from $12.6 million in 2007. Annual gross profit rose 103% to $8.2 million.

The jump was primarily the result of an increase in beverage dispensing locations serving Javo coffee and tea products, now totaling over 10,000. Each Javo dispenser placed at a customer location is expected to generate between $2,500 and $6,000 in annual sales.

Javo supplies a growing list of national and international food service operations, specialty coffee retailers, restaurant chains, food manufacturers, and fuel-convenience stores, including 7-Eleven, Speedway SuperAmerica, BP Products North America, Exxon-Mobil, Sunoco, and Conoco. Javo also serves institutions, and recently completed its first year as a prime vendor to the U.S. Department of Veterans Affairs, converting roughly half of the more than 200 VA facilities nationwide. The company also added locations with Premier, Inc., the nation’s largest healthcare purchasing organization.

Although the growth came at an expected cost (with sales and marketing expenses increasing in line with revenue, resulting in a net loss of $10.8 million, up from $7.4 million in 2007), the company is investing in the future, and anticipates positive earnings for 2009 as fixed expenses are leveraged over increasing sales volumes.

Mr. Cody Ashwell, Java Chairman and CEO, commented, “2008 was a breakout year for Javo and one in which we made substantial progress toward our objective of being a dominant and profitable beverage company providing dispensed coffee and tea to the foodservice industry.”

He added, “We began last year with three primary objectives. First, to reach national scale with a sales and service organization capable of executing against the many national account customer opportunities that we have secured and others that we may win in the future. Second, achieve the critical mass of dispenser placements that would generate cash flow sufficient to cover of our operating expenses. And lastly, integrate key manufacturing processes, previously outsourced, in order to lower our unit production costs and raise profit margins. We are pleased to report that Javo met or exceeded each of these objectives and, as a result, we have a far stronger more stable operating business as we enter 2009.”