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WIRED COFFEE CO. 2016 CORPORATE ANNUAL REPORT | A YEAR OF GROWTH
© 2016 by Wired All rights reserved. This book or parts thereof may not be reproduced in any forms, stored in a retrieval system, or transmitted by any means — electronic, mechanical, photocopy, recording, or otherwise — without prior written permission from the Wired Corporate office, except as provided by United States of America copyright law.
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CONTENTS 05 from the ceo 07 quarterly highlights 08 locations 09 summary 10 letter to shareholders 12 finances 15 corporation information 16 board of directors
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“WIRED IS A COFFEE COMPANY THAT BELIEVES INDIVIDUALS SHOULD NOT HAVE TO SACRIFICE TASTE WHEN MAKING HEALTHCONSCIOUS DECISIONS.” Jacqueline Reilly Chief Executive Officer
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FROM THE CEO, I am pleased to present to you Wired’s annual report for the 2016 fiscal year which layouts out our record performance to date. This past year we have surpassed our financial goals and have grown throughout the state of New York. The openings of 20 new wholesale accounts, that include local restaurants, bakeries, and Wegman’s grocery stores, are a major contributor for this year’s accomplishments. Without our family, friends, shareholders and customers we would never have been able to do so. It is my promise that we continue to strive to be one of the most admired brands and coffee companies. With this, I am pleased to share with you Wired’s financial performance for the fiscal 2016 year. I look forward to our future with confidence and optimism.
Jacqueline Reilly Founder and Chief Executive Officer
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“IN ANYTHING THAT WE DO, ANY ENDEAVOR, IT IS NOT WHAT WE DO; IT IS WHY WE DO IT.” Howard Schultz Chief Marketing Officer
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QUARTERLY HIGHLIGHTS
01 This first quarter was dedicated to improving our company website and online ordering.
02 During our second quarter, we were able to purchase another coffee roaster to increase our coffee output and serve more customers.
03 This third quarter was spent expanding our wholesale accounts throughout the state of New York. Because of this, we have gained more revenue.
04 The fourth and final quarter was dedicated to improvement in service. To do this, Wired held employee workshops and seminars.
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LOCATIONS Wired proudly serves coffee to our customers in over 100 locations in all of New York’s booming cities and towns. These retail and wholesale locations include Syracuse, Skaneateles, Rochester, Albany, Buffalo, and various locations in Long Island.
OSWEGO
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15 LIVINGSTON
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SARATOGA
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ALBANY ONONDAGA
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NEW YORK
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20 *Each black circle represents the number of retail and wholesale providers that are within the respective county of New York. Wired has over 120 revenue streams throughout the state.
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QUEENS & SUFFOLK
OUR SUMMARY Wired has been New York’s local coffee roaster since 2014, making us a staple of the New York community. Available in 4 retail stores and 120 various wholesale accounts, Wired proudly serves the health conscious, the trend-setters and everyone else in between. Our menu includes hot or cold coffee and espresso drinks, hot or cold specialty teas, juices and more. All menu items are available with soy and almond milk alternatives. Our coffee is roasted in house at our corporate production facility and we source only fairly traded and sustainable coffee beans in order to provide great-tasting coffee to our customers. In 2016, Wired has focused on achieving two key principles — improvement and growth. To achieve our goals, we have improved our web presence and online ordering, invested in more coffee roasters to produce more coffee than ever before, doubled the number of wholesale accounts to reach a greater audience, and dedicated time to the training of our employees and wholesale partners so they can best represent our brand and what is stands for. After just a few years, Wired is in a position of great opportunity for the future, continuing to grow and fuel the lives of many caffeine consumers.
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SHAREHOLDERS, I am honored to share with you that Wired has delivered record performance in fiscal 2016, exceeding expectations in almost all areas as we continue to drive growth across geographies, categories, and over multiple channels of distribution. As you review the highlights of our 3rd consecutive business year, I hope you will agree that we are achieving our goals in ways in which we can all be extremely proud. In fiscal 2016, Wired expanded revenue streams to reach a record $678,209, a 12 percent increase over last year driven by a 7 percent rise in wholesale profits. We account this profitability to the opening of 20w new wholesale accounts in New York, that include local restaurants, bakeries, and Wegman’s grocery stores, as well as our success in our retail stores. This impressive revenue growth, coupled with strong margin improvement, led to record year of success for Wired. In addition to our partners, employees, and founders, our success would not be possible without our strategic vision and a foundation of strong values. Together, these values are the driving force behind our performance and the making of great coffee.
OUR FOUNDATIONAL VALUES Our core beliefs shape how we engage with customers, partners, and the communities where we do business. Wired prides itself on making great-tasting coffee with even deeper purpose and meaning. With this, we use guarana in each and every brew.
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Guarana is a small, round, red fruit commonly used in supplements and beverages to boost energy, and increase stamina and physical endurance. It’s energy boosting benefits come from its seeds, which are the richest natural source off caffeine, containing about 2.5 times the amount of caffeine found in coffee. They also contain theophylline and theobromine, which counters the over-stimulating effect of caffeine and makes it ideal for long-term use to boost energy. The best part about it, which is separates Wired a part from the rest, is the use of guarana seed makes this kind of caffeinated beverage a healthy, natural alternative to your predicable cup of one-pump caramel-doluce, venti iced coffee from Starbucks. Above all else, Wired believes that no-one should have to sacrifice taste when making health-conscious decisions. Those of us who lead public companies, like us, have a duty to share our organizations’ success with our people and reach out to the communities we serve, in addition to creating shareholder value. This is why we source all of our fairly traded guarana beans directly from farms with missions of sustainability and ethical practices. We do this because we care about the global environment and the community of farmers, families, and entrepreneurs who provide us with quality beans. Taking these and other steps during 2016 reinforced that we stand for something more than just profitability, while delivering record performance. In the years
to come, we will continue to ask ourselves how Wired can use our business values to benefits ourselves and others. We believe this not only benefits our long-term future but the community as a whole.
RESPONSIBLE GROWTH As we continue to grow, we still promise to test every batch to assure consistency and quality with each cup, so that you can enjoy a great tasting coffee not just from our café, but from the comfort of your home. To realize our ambition of ranking among New York’s most admired brands and enduring companies, we understand more than ever what it means to grow responsibly—with fiscal discipline grounded in our guiding principles. Today, I have no doubt that our values are driving our ability to deliver increased value to our stakeholders, and I want to thank our partners for all they do every day to contribute to our success. Finally, thank you, our shareholders, for your trust in us as we do our best to exceed expectations and enter the most exciting period of our existence.
Jacqueline Reilly Founder and Chief Executive Officer
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FINANCES FINANCIAL SUMMARY OF 2016 IN U.S.. MILLIONS TOTAL REVENUE
$678,209 PERCENTAGE OF SALES BASED ON DRINK
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CUP OF JOE
ESPRESSO
SPECIALTY DRINKS
TEA
36
23
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FINANCES GUARANA COFFEE STATISTICS
QUARTERLY STATISTICS NUMBER NUMBER NUMBER NUMBER NUMBER
OF OF OF OF OF
COFFEE CUPS SOLD ESPRESSO DRINKS SOLD SPECIALTY DRINKS SOLD TEA DRINKS SOLD GROUNDS SOLD
Q1
Q2
Q3
Q4
5,261 2,210 1,763 1,820 305
7,293 1,208 1,302 2,019 376
5,108 3,082 1,765 1,586 1,000
7,076 5,086 2,587 1,480 1,208
COMPARATIVE STOCK PERFORMANCE WRD
S & P 500
NASDAQ
$300 The graph depicts the total return to shareholders from Dec. 30, 2014 through Dec. 30, 2016, relative to the performance of the Standard & Poor’s 500 Index, the NASDAQ Composite Index. The stock price performance shown in the graph is not necessarily indicative of future price performance.
$200
$100
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
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FINANCES PERCENTAGE OF SALES BASED ON REVENUE STREAM
10% 90%
15% 85%
2013
2014
42% 58% 2015 WHOLESALE ACCOUNTS
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61% 39% 2016
RETAIL STORES
INFORMATION HEADQUARTERS Wired Corporation 10 Harvard Place Syracuse, NY 13210 Email: info@wired.com T: 315.448.2108
STOCK LISTING Wired common stock is traded on the New York Stock Exchange. The Wired trading symbol is “WRD”.
SHAREHOLDERS MEETING The annual meeting will be held 9:00AM Thursday August 11, 2016 at the Sheraton Hotel and Conference Center, located on 801 University Ave, Syracuse, NY 13210.
AUDITORS Reilly and Simons LLP 8129 Commonwealth Plaza, 17th Floor New York, NY 10016 T: 245.768.9730
TRADEMARKS Certain trademarks in this annual report are owned or licensed by Wired Corporation or its subsidiaries.
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BOARD OF DIRECTORS JACQUELINE REILLY Founder and Chief Executive Officer
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ALYSSA PAUKER Chief Financial Officer
MARGARET MOREHOUSE Executive Vice President
MARISSA BLANCHARD Administrative Director
LAURA TATRO Chief Marketing Officer
CAROLINE HERES Vice President of Investor Relations
MARISSA ANGELONE Vice Chairman
LUKE RAFFERTY Vice President of Planning
MARK REILLY Sr. Vice President of Finance
ERIC ROSENBURG Vice President of Marketing
MICHELLE MARTIN Sr. Vice President of Sales
CASSANDRA LACKO Vice President of Analysis
MADELINE FARNHAM Vice President of Operations
JULIE GELB Vice President of Operations
RYAN MORRIS Vice President of Communications
JIM SALZANO Corporate Secretary
SCOTT ALPERIN Advisory Director
SHANNON SIMONS Advisory Director
SENIOR LEADERSHIP TEAM Jacqueline Reilly Margaret Morehouse Laura Tatro Jim Salzano Scott Alperin Clifford Burrows Curtis Garner Michelle Martin Sharon Rothstein
Š 2016 by Wired All rights reserved. GLOBAL RESPONSIBILITY The Wired Corporation is committed to being a deeply responsible company in the communities in which we do business. The programs and goals that address these commitments are vital to the company’s overall business strategy and can be reviewed in the annual Global Responsibility report. Please see Wired fiscal 2016 Global Responsibility Report, available online at http://www.wired.com/responsibility/global-report. UPDATED FINANCIAL INFORMATION Please visit http://investor.wired.com to find the latest financial information publicly available for the company.
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“THE PHILOSOPHY OF WIRED IS UNCOMPLICATED: WE MAKE GREAT-TASTING COFFEE WITH SIMPLE, HEALTHY INGREDIENTS.” Margaret Morehouse Executive Vice President
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