Jones Soda Co. (JSDA, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 $18.8 million; its shares were traded at around $0.71 with and P/S ratio of 0.5.
Net loss for the quarter ended September 30, 2009 decreased to $1.5 million from a net loss of $5.3 million for the quarter ended September 30, 2008. This was due to improvements to our gross profit of $547,000 through reductions in promotion allowances and slotting fees due to cost containment measures and a significant reduction in freight and storage costs per case due to reduced fuel surcharges and inventory management. Additionally the reduction in net loss was attributable to decreases in promotion and selling expense of $1.9 million and general and administrative expenses of $1.3 million as a result of our cost containment efforts.
For the nine months ended September 30, 2009, revenue was approximately $21.7 million, a decrease of $8.1 million, or 27.1%, from $29.8 million in revenue for the nine months ended September 30, 2008. The decrease in revenue was primarily attributable to a 30.0% decrease in case sales through our DTR and DSD channels to 1,691,800 cases. A decline in case sales of our core product, Jones Soda glass bottles, of approximately 421,500 cases contributed to the reduced case sales, and we believe was caused primarily by the discontinuance of Jones Soda glass bottles at some of our major retailers in our DTR and DSD channels which occurred in 2008 as part of our realigned channel focus. In addition, we believe reduced demand resulting from the impact of the economic downturn on consumer spending levels negatively affected our case sales, and we expect economic conditions to continue to have a negative impact on our business for at least the remainder of 2009. Also contributing to the decline was a reduction in 24C shipments of 238,900 cases; 24C had stronger pull-through a year ago subsequent to its launch in 2007. Additionally, case sales of concentrate to National Beverage decreased to 685,800 cases, or 49.8%, compared to the same period of 2008. As part of managements strategic refocus, we will continue to emphasize our higher-margin core products, including our Jones Pure Cane Soda glass bottle business, with less emphasis on our CSD business, which is a lower margin business for us, and we expect this strategy will continue to have a negative impact on case sales of concentrate compared to prior periods.
For the nine months ended September 30, 2009, promotion allowances and slotting fees, which are a reduction to revenue, totaled $2.4 million, a decrease of $1.9 million or 43.7% from $4.3 million a year ago. The promotion allowances and slotting fees for the nine months ended September 30, 2009 were primarily attributable to promoting some new distribution points in our DSD business. The promotion allowances and slotting fees a year ago related primarily to price promotion programs implemented for our DTR and CSD business and for the continued introduction of 24C across North America. We believe using promotional allowances as a way to promote our core products, while judiciously using slotting fees to gain access on new products, is a more balanced strategy in this economy. As a result, we anticipate for the remainder of 2009 an overall reduction in our promotional allowance and slotting fee costs with an emphasis on our higher margin business, including our core glass bottle business, and only modest slotting fees for the product rollout of Jones GABA in comparison to previous product launches.
For the nine months ended September 30, 2009, gross profit decreased by approximately $855,000, or 14.6% to $5.0 million as compared to $5.9 million in gross profit for the nine months ended September 30, 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 and lower DSD volumes in the majority of U.S. regions due, we believe, to softer consumer demand as a result of the economic downturn. These decreases to gross profit were offset by a reduction in promotion allowances and slotting fees and by a significant reduction in freight and storage costs per case due to reduced fuel surcharges and inventory management. For the nine months ended September 30, 2009, gross profit as a percentage of revenue increased to 23.1% from 19.7% compared to the same period in 2008.
Promotion and selling expenses for the nine months ended September 30, 2009 were approximately $6.2 million, a decrease of $3.8 million, or 38.3%, from $10.0 million for the nine months ended September 30, 2008. Promotion and selling expenses as a percentage of revenue decreased to 28.3% for the quarter ended September 30, 2009, from 33.5% 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 $2.9 million, to $3.2 million, or 14.7% of revenue. This decrease resulted primarily from decreases in sales personnel in conjunction with the strategic refocus in the fourth quarter of 2008 and continued cost containment efforts during 2009, which included reductions in workforce and our realigned channel focus which contributed to a decrease in promotional expense, broker and invasion fees. The effects of the workforce reductions, including the most recent reduction in the third quarter of 2009, are expected to reduce ongoing promotion and selling expenses in 2009 compared to prior year periods. Also contributing to the decrease in promotion and selling expenses was a $930,000 decrease in trade promotion and marketing expenses from $3.9 million to $3.0 million, or 13.6% of revenue, due in part to our cost containment efforts.
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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 $18.8 million; its shares were traded at around $0.71 with and P/S ratio of 0.5.
Highlight of Business Operations:
Promotion and selling expenses for the quarter ended September 30, 2009 were approximately $1.6 million, a decrease of $1.9 million, or 54.3%, from $3.5 million for the quarter ended September 30, 2008. Promotion and selling expenses as a percentage of revenue decreased to 22.2% for the quarter ended September 30, 2009, from 40.1% 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 $1.2 million, to $832,000, or 11.6% of revenue. This decrease resulted primarily from decreases in sales personnel in conjunction with the strategic refocus in the fourth quarter of 2008 and continued cost containment efforts during 2009, which included reductions in workforce and our realigned channel focus which contributed to a decrease in promotional expenses. The effects of the workforce reductions including the most recent reduction in the third quarter of 2009 are expected to reduce ongoing promotion and selling expenses for the remainder of 2009 compared to prior year periods. Also contributing to the decrease in promotion and selling expenses was a decrease in marketing expenses of $651,000, to $759,000, or 10.6% of revenue for the quarter ended September 30, 2009, from $1.4 million in the same period in 2008 due in part to our cost containment efforts.Net loss for the quarter ended September 30, 2009 decreased to $1.5 million from a net loss of $5.3 million for the quarter ended September 30, 2008. This was due to improvements to our gross profit of $547,000 through reductions in promotion allowances and slotting fees due to cost containment measures and a significant reduction in freight and storage costs per case due to reduced fuel surcharges and inventory management. Additionally the reduction in net loss was attributable to decreases in promotion and selling expense of $1.9 million and general and administrative expenses of $1.3 million as a result of our cost containment efforts.
For the nine months ended September 30, 2009, revenue was approximately $21.7 million, a decrease of $8.1 million, or 27.1%, from $29.8 million in revenue for the nine months ended September 30, 2008. The decrease in revenue was primarily attributable to a 30.0% decrease in case sales through our DTR and DSD channels to 1,691,800 cases. A decline in case sales of our core product, Jones Soda glass bottles, of approximately 421,500 cases contributed to the reduced case sales, and we believe was caused primarily by the discontinuance of Jones Soda glass bottles at some of our major retailers in our DTR and DSD channels which occurred in 2008 as part of our realigned channel focus. In addition, we believe reduced demand resulting from the impact of the economic downturn on consumer spending levels negatively affected our case sales, and we expect economic conditions to continue to have a negative impact on our business for at least the remainder of 2009. Also contributing to the decline was a reduction in 24C shipments of 238,900 cases; 24C had stronger pull-through a year ago subsequent to its launch in 2007. Additionally, case sales of concentrate to National Beverage decreased to 685,800 cases, or 49.8%, compared to the same period of 2008. As part of managements strategic refocus, we will continue to emphasize our higher-margin core products, including our Jones Pure Cane Soda glass bottle business, with less emphasis on our CSD business, which is a lower margin business for us, and we expect this strategy will continue to have a negative impact on case sales of concentrate compared to prior periods.
For the nine months ended September 30, 2009, promotion allowances and slotting fees, which are a reduction to revenue, totaled $2.4 million, a decrease of $1.9 million or 43.7% from $4.3 million a year ago. The promotion allowances and slotting fees for the nine months ended September 30, 2009 were primarily attributable to promoting some new distribution points in our DSD business. The promotion allowances and slotting fees a year ago related primarily to price promotion programs implemented for our DTR and CSD business and for the continued introduction of 24C across North America. We believe using promotional allowances as a way to promote our core products, while judiciously using slotting fees to gain access on new products, is a more balanced strategy in this economy. As a result, we anticipate for the remainder of 2009 an overall reduction in our promotional allowance and slotting fee costs with an emphasis on our higher margin business, including our core glass bottle business, and only modest slotting fees for the product rollout of Jones GABA in comparison to previous product launches.
For the nine months ended September 30, 2009, gross profit decreased by approximately $855,000, or 14.6% to $5.0 million as compared to $5.9 million in gross profit for the nine months ended September 30, 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 and lower DSD volumes in the majority of U.S. regions due, we believe, to softer consumer demand as a result of the economic downturn. These decreases to gross profit were offset by a reduction in promotion allowances and slotting fees and by a significant reduction in freight and storage costs per case due to reduced fuel surcharges and inventory management. For the nine months ended September 30, 2009, gross profit as a percentage of revenue increased to 23.1% from 19.7% compared to the same period in 2008.
Promotion and selling expenses for the nine months ended September 30, 2009 were approximately $6.2 million, a decrease of $3.8 million, or 38.3%, from $10.0 million for the nine months ended September 30, 2008. Promotion and selling expenses as a percentage of revenue decreased to 28.3% for the quarter ended September 30, 2009, from 33.5% 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 $2.9 million, to $3.2 million, or 14.7% of revenue. This decrease resulted primarily from decreases in sales personnel in conjunction with the strategic refocus in the fourth quarter of 2008 and continued cost containment efforts during 2009, which included reductions in workforce and our realigned channel focus which contributed to a decrease in promotional expense, broker and invasion fees. The effects of the workforce reductions, including the most recent reduction in the third quarter of 2009, are expected to reduce ongoing promotion and selling expenses in 2009 compared to prior year periods. Also contributing to the decrease in promotion and selling expenses was a $930,000 decrease in trade promotion and marketing expenses from $3.9 million to $3.0 million, or 13.6% of revenue, due in part to our cost containment efforts.
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