New World Coffee announces 1997 growth plans, two new markets

Business Wire, Sept 20, 1996

HOUSTON--(BUSINESS WIRE)--Sept. 20, 1996--New World Coffee Inc. (NASDAQ:NWCI) said today it expects to achieve significant net income profitability, to have eighty stores in operation and be in two new markets by year-end 1997.

In a presentation before the Regional Investment Bankers Association in Houston, Ramin Kamfar, president and chief executive officer of New World said the company's goal for 1997 is to double its size by adding a minimum of forty new stores, for which two leases have been signed and twenty-six letters of intent have already been issued. Further, the company expects to enter the Boston and Washington D.C. metro markets during 1997. New World added six stores since its initial public offering in the first quarter of 1996, recently announced the pending acquisition of the six store Willoughby's chain, and expects to add six additional stores before year-end, for a net total of forty in the New York, New Jersey, Pennsylvania and Connecticut markets.

Kamfar said, "The Willoughby's merger solidifies our position in the Northeast, adds significant coffee talent to our team, dramatically reduces our coffee cost of goods, and opens up wholesale and mail order opportunities for us. Over the next two years, we will focus on expansion in the Boston to Washington corridor in order to establish a strong regional base for further expansion. We forsee a potential of 400 to 600 New World Coffee stores in the northeast United States in the next five years."

Kamfar added that, "Store level financials have continued to improve. Based on current performance, residential stores are generating annualized sales of over $550,000, sales to investment ratios of 2.3x, annual cash return on investments of over 40%, and sales per square foot of approximately $900. As a result of recent expansion, the company expects to see dramatic financial improvements in the third and fourth quarters of 1996. Furthermore," he noted, "as our expansion reaches the critical mass level of fifty stores, the resulting improved general and administrative expense leverage will produce profitability at the net income level."

Kamfar concluded, "We expect 1997 to be our breakthrough year, with increasing industry consolidation providing lucrative acquisition opportunities, allowing for hyper-growth expansion and attaining net income profitability."

New World Coffee Inc. the largest coffee bar company based in the Northeastern United States, currently owns and operates 30 espresso bars in the New York, New Jersey, Connecticut and Pennsylvania areas.

CONTACT: New World Coffee

R. Ramin Kamfar

212/343-0552 ext. 21

or

KCSA

Adam Friedman/Paul Holm

212/682-6565 ext. 215/201