Fresh Healthy Vending International Inc (OTCMKTS:VEND) Making A Comeback

Fresh Healthy Vending International Inc (OTCMKTS:VEND) is starting 2016 off with a bang. Shares have exploded higher after the company announced that it had signed a non-binding term sheet for a revolutionary new frozen yogurt robot kiosk. It's time to dig in and see if this move is sustainable and what it means for shareholders.VEND is based in San Diego. The company 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 to serve the growing market of health-conscious consumers. The Company has over 230 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. Currently Fresh Healthy Vending is listed as the 7th of 75 top new franchises and #1 in category on Entrepreneur Magazine's Franchise 500 list in 2015. The Company has booked over 3,300 machines for placement in schools, universities, hospitals, community centers, military bases, airports, fitness facilities, YMCAs, libraries and many other locations.Its most recent deal is an agreement with Robofusion, for the exclusive franchise distribution rights of the Reis & Irvy's frozen yogurt robot kiosk in the United States and Canada, excluding Puerto Rico. The Fro-Style 9 Cube, the latest offering from Robofusion's interactive robotic kiosks, maintains a footprint of just 12 square feet. The Cube is fully automated, delivering up to 60 servings per hour of customized frozen yogurt goodness. Customers can layer or blend up to three froyo flavors (of nine options) and choose from six toppings.

Fresh Healthy Vending intends to develop an entirely new franchise concept for the frozen yogurt kiosks. With a signed term sheet, the Company will immediately commence preparing and negotiating a definitive license agreement. The Company intends to start marketing the new concept in the spring of 2016, with delivery of the first kiosks in the fall of 2016. Chairman Nicholas Yates said:

"As the pioneer in the fresh healthy vending space, we were looking for that next great idea that could diversify our Company's offerings and increase our future growth potential. We believe that the Reis & Irvy's Kiosk does just that. We have already developed our corporate infrastructure and therefore, we believe that layering another concept on top of our core competencies will allow for us to spread those corporate costs over a larger base of revenues."

In fiscal 2015, VEND reported revenues of $6,273,722 for the year ended June 30, 2015, compared to revenues of $5,258,027 for the year ended June 30, 2014. This represented an increase in revenues of $1,015,695 or 19.3%. The increase was primarily a result of expanded marketing efforts, including national radio advertising campaign and Internet marketing. The increase in total revenues also included an increase in royalties of $135,917 from $49,474 in fiscal 2014 to $185,391 in fiscal 2015.

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Gross margin percentage was 53.1% and 51.7% for the years ended June 30, 2015 and 2014, respectively. The increase in gross margin percentage of 1.4% in fiscal 2015 from 2014 was due primarily to an increase in royalties and agency sales, which carry a higher gross margin percentage.

As of June 30, 2015, the Company had a cash balance of $325,337 and total current assets of $3,749,924. Furthermore, at June 30, 2015 and 2014, the Company had deferred revenues of $6,428,156 and $5,456,969, respectively. The increase in deferred revenues was directly related to the increase in bookings during the year, in addition to the increase in recognized revenue.

VEND has been working hard to expand its vending machines into more schools, colleges, community centers and military bases. Fresh Healthy Vending has been making healthy snacks and drinks available to our nation's youth, which has been a high priority of First Lady Michelle Obama for many years.

31 healthy vending machines have already been installed across the country's military bases, including Dobbins Air Force Base in Georgia, Dover Air Force Base in Delaware and Warren Air Force Base in Wyoming. Fresh Healthy Vending machines give the men and women of America's Armed Forces a better way to get healthy snacks and beverages when they're on duty for America or on-the-go. Other bases with Fresh Healthy Vending machines include Vance Air Force Base in Oklahoma, Moody Air Force Base in Georgia, the Maryland National Guard Base in Maryland, and Selfridge National Guard Base in Michigan.

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VEND is an exciting name on the OTC markets. The latest move higher has been quite explosive and on high volume. We think this is a sign of things to come in 2016, especially if the frozen yogurt business takes off and VEND signs more deals. We'll be updating Insider Financial on VEND as soon as we know more. Make sure you sign up to get the latest on VEND.

Disclosure: We have no position in VEND either long or short. We have not been compensated for this article.