Bravo! raises funds to up production

By Staff Reporter

- Last updated on GMT

Related tags Finance Stock Revenue

Bravo! Foods is planning to increase production capacity of its
fortified flavored milk products - a plan that will be facilitated
by almost $19 million in equity financing.

The Florida-based brand development company announced last week that it has entered into agreements for $20.25 million in equity financing, through placing 40.5 million shares of common stock to institutional and accredited investors. After transaction expenses, Bravo! expects to receive around $18.9 million.

Its domestic capacity for Slammers is currently 2.5 million units per month, but over the coming months, the company plans to scale this up to reach 7.5 million units by spring 2006. It has also said that it is exploring third parties that may provide new capacity in 2007.

From Bravo!'s latest financial results it is plain to see why the need for additional capacity is pressing. So far, fiscal 2005 has proved a bumper year, with revenue from unit sales for the first nine months up 293 percent to $ 6.56 million.

The net loss for the quarter ended September was $4.9 million, but this included a one-off $3 million finder's fee for Bravo!'s distribution agreement with Coca Cola Enterprises announced in September, whereby the fizzy drink-maker's bottling arm will distribute Bravo!'s Slammers drinks in the United States for a 10-year term.

Part of the funding will be used to recoup this fee. Other amounts have been earmarked for marketing campaigns, the redemption of 30.3 million warrants and general working capital expenses.

Further funds may also be raised thanks to the issue of warrants to investors to purchase up to 15,187,500 shares of common stocks, at $0.80 per share. The new distribution deal also gave CCE the option to take up to a 10 percent stake in Bravo!.

CEO Roy Warren said earlier this month that the company's outlook for full year 2005 "remains positive"​.

It is expecting gross revenues for the fourth quarter to be between $6 and $7 million.

"We are aggressively pursuing the necessary drivers to sustain momentum over the next few months, including enhanced production capabilities to meet expected demand, and nationwide sales and marketing efforts,"​ said Warren.

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