Jones Soda markets and sells its Jones Soda Jones Naturals and Jones Energy brands through its distribution network in select markets across North America. A leader in the premium soda category Jones is known for its innovative labeling technique that incorporates always-changing photos sent in from its consumers. Jones Soda products are sold through traditional beverage retailers and everywhere you'd never expect to find a soda. Jones Soda Co. has a market cap of $27.8 million; its shares were traded at around $1.05 with and P/S ratio of 0.8.
Highlight of Business Operations:For the quarter ended March 31, 2009, gross profit decreased by approximately $477,000, or 24.8% to $1.4 million as compared to $1.9 million in gross profit for the quarter ended March 31, 2008. This was primarily a result of lower sales volumes in our DTR channel due to the discontinuance of the Jones Soda glass bottles at some of our major retailers offset by the product launch of our higher margin Jones GABA. For the quarter ended March 31, 2009, gross profit as a percentage of revenue remained flat at 20.4% compared to the first quarter of 2008 despite the significant decline in revenue offset by sales of our higher-margin Jones GABA product.
Promotion and selling expenses for the quarter ended March 31, 2009 were approximately $2.3 million, a decrease of $682,000, or 22.7%, from $3.0 million for the quarter ended March 31, 2008. Promotion and selling expenses as a percentage of revenue increased to 32.8% for the quarter ended March 31, 2009, from 31.9% in the same period in 2008. The decrease in promotion and selling expenses was primarily due to a decrease in selling expenses year over year of $349,000, to $1.2 million, or 17.0% of revenue. This decrease was primarily due to decreases in sales personnel in conjunction with the strategic refocus in the fourth quarter of 2008 resulting in a reduction in force. The effect of the workforce reduction is expected to reduce ongoing promotion and selling expenses in 2009. Also contributing to the decrease in promotion and selling expenses was a decrease in marketing expenses of $298,000 to $1.0 million, or 14.1% of revenue, from $1.3 million in the first quarter a year ago. This was primarily due to decreases in brand building efforts including promotional events, in conjunction with our cost containment efforts.
Net loss for the quarter ended March 31, 2009 decreased to $2.6 million from a net loss of $3.9 million for the quarter ended March 31, 2008. This was due to a decrease of $1.1 million in general and administrative expenses as a result of decreases in salaries and benefits and professional fees as well as a decrease in promotion and selling expense of $682,000 as result of our cost containment efforts. Offsetting these decreases was reduction in gross profit of $477,000 as a result of lower sales in our DTR channel driven by the decline in sales of Jones Soda glass bottles, as well as reduced overall demand resulting from the economic downturn.
As of March 31, 2009, we had cash, cash-equivalents and short-term investments of approximately $8.2 million and working capital of $14.4 million. We incurred a net loss of $2.6 million and accumulated deficit increased to $32.0 million as of March 31, 2009.
Cash used in operations during the quarter ended March 31, 2009 totaled $4.3 million, primarily due to our loss from operations and an increase in accounts receivable due our launch of Jones GABA. For the quarter ended March 31, 2009, net cash used by investing activities totaled approximately $19,000 primarily due to purchase of equipment, while net cash used by financing activities totaled approximately $36,000 due to the repayment of capital lease obligations. We do not believe our cash used in operations that we experienced this quarter to be indicative of our cash burn for the remaining quarters of this year. Our cash flows vary throughout the year based on seasonality. We traditionally use more cash in the first half of the year as we build inventory to support our seasonally-stronger shipping months of April through September, with cash provided by operating activities expected to increase in the second half of the year as we collect receivables generated during our stronger shipping months. In addition, the cash used in the first quarter 2009 included approximately $1.2 million to purchase raw materials under the terms of our amended Pharma GABA supply agreement. As discussed below, we expect our GABA purchase requirements to be substantially lower for the remainder of the year.
Finally, our operating plan factors in the use of our cash to meet our contractual obligations for 2009 totaling approximately $8.8 million. A substantial portion of these contractual obligations (approximately 82% of the total for 2009) consist of obligations to purchase raw materials, including approximately $5 million in sugar under our supply agreements with our three pure cane sugar suppliers and approximately $1.8 million in glass under our supply agreement with our glass supplier. We enter into these supply agreements in order to fix the cost of these key raw materials, which we expect will be used in the ordinary course of our business in 2009 and beyond. Our purchase obligations also included a commitment under our amended Pharma GABA supply agreement to order approximately $1.8 million of Pharma GABA by December 31, 2008 and, on or before January 31, 2009, to pay 50% of that amount, with the remaining portion to be paid in six equal monthly installments commencing on February 24, 2009 and ending July 26, 2009.
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