Ms. Sherry Tryssenaar reports

TEN PEAKS COFFEE COMPANY REPORTS FIRST QUARTER RESULTS

Ten Peaks Coffee Company Inc. will hold a conference call to discuss its financial results for the three months ended March 31, 2018, tomorrow, May 10, at 9 a.m. PT (12 p.m. ET). To participate, please dial (877) 407-9205 (toll free) or (201) 689-8054 (international) approximately five minutes before the call and provide the company name. A replay will be available through May 24, 2018 at (877) 481-4010 (toll free) or (919) 882-2331 (international) passcode: 29150.

Ten Peaks Coffee Company Inc. today reported financial results for the three months ended March 31, 2018. This represents the first quarter of the company's 2018 fiscal year. Ten Peaks is a leading specialty coffee company doing business through two wholly owned subsidiaries: Swiss Water Decaffeinated Coffee Company, Inc. ("SWDCC") and Seaforth Supply Chain Solutions Inc. ("Seaforth"), the company's green coffee handling and storage subsidiary. SWDCC is a premium green coffee decaffeinator located in Burnaby, BC, which employs the proprietary SWISS WATERtrademark Process to decaffeinate green coffee without the use of chemicals. This is the company's primary business, and the results reported here reflect SWDCC's operating performance.

During the first quarter, Ten Peaks recorded strong volume growth and increased revenues compared to Q1 2017, as it continued to gain market share against its competitors. Other financial measures were down, due to higher green coffee costs, higher operating costs incurred to support the company's strategic growth initiatives and a stronger Canadian dollar.

Notably, SWDCC's largest geographic market by volume during the period was the United States. By dollar value, 53% of the company's first quarter sales were to the US, 35% were to Canada and the remaining 12% were to international markets. This is the first time in SWDCC's history that sales to the US comprised more than 50% of the company's quarterly revenue, demonstrating the rising demand for decaffeinated coffee in that key market.

                                      Performance Highlights
                         In $000s except per share amounts (unaudited)
 
                            3 months ended  March 31, 2018     3 months ended  March 31, 2017

Sales                       $         21,215                   $         19,223
Gross Profit                          2,842                              3,035
Operating income                      555                                1,267
Net income                            489                                1,435
EBITDA1                               1,106                              1,677
Net income - basic2         $         0.05                     $         0.16
Net income - diluted2       $         0.03                     $         0.08
            
(1) EBITDA is defined in the section on 'Non-IFRS Financial Measures' below and is a
   "Non-GAAP Financial Measure" as defined by CSA Staff Notice 52-306.
(2) Per-share calculations are based on the weighted average number of shares outstanding
    during the period.

First quarter processing volumes grew by 17% compared to Q1 2017, with shipments to roasters driving the growth. During the period, volumes to roasters (who roast and package coffee for sale to consumers in their own coffee shops, or for home or office use) increased by 27%. Volumes to importers (who act like grocery stores to roasters, by sourcing and importing green coffee from various origins and carrying a selection of different origins and quality levels for roasters to choose from) were flat.

"The significant growth we are seeing in our shipments to roasters is coming in two ways," said Frank Dennis, President and CEO of Ten Peaks Coffee Company Inc. "First, we have won some new business from roasters who previously obtained their decaffeinated coffees from a CO2 plant in Europe that closed last year. Additionally, we have increased our business with existing customers, who are growing in terms of distribution or locations, or may have expanded their product offerings."

Volumes to SWDCC's specialty accounts grew by 22% compared to Q1 2017, while volumes to the company's commercial accounts increased by 14%.

First quarter sales totaled $21.2 million, an increase of $2.0 million, or 10%, from the same period in 2017. Process revenue (the amount SWDCC charges its customers for decaffeinating green coffee) increased by 12%, reflecting the increase in processing volumes, partially offset by a lower US dollar. In Q1 2018, the US$ averaged $1.26 Canadian, a decrease of 5% compared to the same period last year. Green revenue (the amount SWDCC charges its customers for the green coffee it purchases for decaffeination) increased by 10%, reflecting the higher volumes, partially offset by a lower green coffee futures market ("NY'C'"). In Q1 2018, the NY'C' averaged US$1.21/lb compared to an average of US$1.45/lb during the same period last year. Distribution revenue (the shipping, handling and warehousing charges billed to customers) rose by 14%, due to growth in Seaforth's warehousing business and the increased processing volumes during the period.

Cost of sales for the first quarter rose by 14% to $18.4 million. This was primarily due to higher green coffee costs, owing to the higher NY'C'. Cost of sales also rose with the addition of a new warehouse for Seaforth in Q4 2017, to accommodate growth in this business and alleviate significant backlogs in unloading inbound coffee. Additionally, cost of sales increased with higher freight charges and variable production costs, which were associated with the significant growth in SWDCC's volumes.

Gross profit decreased by 6% in the first quarter, as the increase in the company's cost of sales exceeded the increase in its revenue.

Administration expenses rose by 33% to $1.5 million in the first quarter. The increase largely reflects costs incurred to support the company's strategic growth initiatives for 2018 and into 2019 when new capacity comes on line. This includes higher staffing and staff-related expenses, such as stock-based compensation expenses and recruitment fees for a number of high-level management positions.

Sales and marketing expenses grew by 28% to $0.8 million in the first quarter. The increase here is related to the company's expansion in Europe, increased marketing and consumer awareness activities, and related travel costs in support of SWDCC's growth initiatives.

First quarter operating income of $0.6 million was down by 56% due primarily to these factors.

In October 2016, Ten Peaks entered into a convertible debenture. Under IFRS, this instrument is deemed to contain an embedded option which must be revalued at each balance sheet date. During the first quarter, revaluation of this option resulted in a gain of $0.5 million, compared to a gain of $0.9 million in the same period last year.

Net income for the first quarter of this year was $0.5 million, compared to $1.4 million in Q1 2017. The change was due to the decline in quarterly gross profit, the reduced gain on the embedded option, and the higher operating costs.

EBITDA for the first quarter declined by 34% to $1.1 million, reflecting increased operating costs and reduced gains on risk management activities in the period.

Outlook

Overall, management expects to record double-digit volume increases in 2018, with a number of factors supporting an expectation of ongoing growth in SWDCC's (and therefore Ten Peaks') business.

The market for decaffeinated coffee continues to expand. The rate of growth in the decaffeinated coffee market has increased year-over-year, and continues to outpace growth in the US coffee market as a whole. Sales of specialty decaffeinated coffees are also increasing year-over-year, and are gaining share in the total coffee market. 1

Management believes this increased demand is due, in part, to the premiumization of the coffee market, as well as growing awareness and consumption of premium decaffeinated coffee. Today, the largest consumers of premium decaffeinated coffees are 18 to 24-year-olds, who want to drink excellent coffee all day long, without worrying about the potential side effects of caffeine.

More importantly, various media sources2 have recently underscored the health and environmental hazards associated with methylene chloride (the primary chemical used by SWDCC's competitors to decaffeinate coffee). Management believes this rise in awareness is driving demand for SWISS WATER Process decaffeinated coffees, as more consumers than ever seek to avoid food and drinks that employ artificial ingredients and chemicals in their production.

The supply side of the market is undergoing significant shifts as well. As noted previously, an older decaffeination plant in Europe closed in 2017, reducing the number of available chemical free, third-party decaffeinators and contributing to SWDCC's business growth. More recently, it was announced that a similar CO2 plant in Houston, Texas will be closing this summer. The Houston facility had primarily supplied decaffeinated coffee to more traditional coffee brands, which have been losing share to premium coffees in recent years. The closure will reduce competitive pressure and leaves a further gap in the supply of third-party chemical free decaffeination services.

"We believe that the recent reduction in available chemical free decaffeination capacity will allow us to more rapidly use the additional capacity we have coming online in 2019," said Dennis. "At the same time, to address more immediate growth in demand, we have just completed an important efficiency enhancement project at our current facility to further increase available capacity there."

As noted previously, Ten Peaks is building a new state-of-the-art production facility that will enable the company to meet the anticipated long-term growth in demand for its premium decaffeinated coffees. Construction of the facility, located in Delta, BC, is expected to be completed this year. Initially, the plant will house one new production line, although the site is large enough for expansion to meet growing demand well into the future. The new production line is expected to be commissioned in the third quarter of 2019. The additional capacity that was added at SWDCC's Burnaby, B.C. facility in Q1 2016, together with the efficiency improvements that were recently completed, are expected to be sufficient to meet anticipated growth in demand until the new line is operational.

"Over the next two years, our primary focus will be to position SWDCC for steady future growth," added Dennis. "We are in the process of setting up a European subsidiary and opening a European sales office to better serve customers in the largest decaffeinated coffee market in the world. In addition, we are expanding our ability to target specific customer groups by selectively adding to our sales and marketing team in the United States. While these initiatives will increase our expenses somewhat, they are expected to begin generating increased sales orders in the latter part of this year. It's important to note that major account conversions typically take several quarters. Moving forward, the expansion of our European and US sales teams in 2018 will prepare us to ramp up orders and win new business as we add significant capacity with our new facility in 2019."

Management is also taking measures to improve the financial results of Seaforth, Ten Peaks' coffee warehousing and handling business. In November 2017, Seaforth entered into a lease agreement for a new warehouse. As the warehouse became operational in Q1 of this year, some one-time costs were incurred to set up the warehouse and relocate coffees in store. As a result, Seaforth's overall costs were up significantly over the same period last year, reducing Ten Peaks' consolidated results in the first quarter. In response, management is undertaking a detailed review of the operations to ensure that Seaforth once again provides a positive net contribution to Ten Peaks' financial results by the end of the year.

Finally, management will be asking shareholders to change the name of Ten Peaks to "Swiss Water Decaffeinated Coffee Inc." at the upcoming Annual and Special Meeting of shareholders. If approved, the change will take effect at the end of this calendar year. Concurrently, SWDCC will be merged into Ten Peaks, and the resulting entity will bear the new name. This simplified structure will allow for shareholders and potential investors to more readily associate the investment opportunity with the proprietary SWISS WATERtrademark Process, and will also modestly decrease the company's compliance costs.

Quarterly Dividends

On April 16, 2018, Ten Peaks paid an eligible dividend in the amount of $0.6 million ($0.0625 per share) to shareholders of record on March 29, 2018.

Additional Information

A more detailed discussion of Ten Peaks' recent financial results and management's outlook can be found in the company's MD&A for the three months ended March 31, 2018. This document, along with Ten Peaks' condensed consolidated interim financial statements, will be posted on SEDAR (www.sedar.com) and on the company's website on May 9, 2018.

Company Profile

Ten Peaks is a publicly traded company that owns all of the interests of the Swiss Water Decaffeinated Coffee Company Inc. (SWDCC), a premium green coffee decaffeinator located in Burnaby, BC. It also owns and operates Seaforth Supply Chain Solutions Inc. (Seaforth), a green coffee handling and storage business located in Metro Vancouver.

1 STUDYLOGIC report April 2018

2 New York Times has published and a piece on EPA regulations, and they are highlighting methylene chloride as a key chemical that isn't, but should be, regulated, because it's a hazard to people's health. Earlier this year, New Scientist published a report about how methylene chloride is slowing the regeneration of the ozone layer. This report was picked up by other media companies as well.

We seek Safe Harbor.