The decrease in revenue was primarily attributable to the discontinuance of the Jones Soda glass bottles at some of the company’s major retailers in its DTR channel, which occurred in 2008 as part of a realigned channel focus on higher margin points of distribution, and to a lesser extent, reduced demand resulting in large part from the impact of the economic downturn on consumer spending levels.
Although finished product case sales declined 30% to 539,300 cases in the first quarter compared with the same period in 2008, the decrease was partially offset by the February 2009 launch of Jones Gaba, which contributed 29,800 cases for the quarter.
Gross profit as a percentage of revenue remained flat at 20%, driven by the product launch of the higher margin Jones Gaba product offset by a decline in total revenue as a result of lower case sales of the core product, Jones Soda glass bottles.
Operating expenses decreased 30%, compared with the corresponding period a year ago, due primarily to the strategic refocus in the fourth quarter of 2008, which resulted in a reduction in force that reduced salaries and benefits expense, as well as cost containment measures that reduced marketing and promotional expense.
Joth Ricci, president and CEO, said: “Our first-quarter results reflect the challenging economic environment and our ongoing transition to a leaner organisation as we continue to make adjustments to manage bottom-line improvement.
“We had planned case sales to be down vs a year ago, as we continue to realign our distribution and focus more resources on a higher margin, single-serve strategy for our product portfolio. Accordingly, we continued to right-size our infrastructure and effectively controlled spending, evidenced by the 30% reduction in operating expenses vs a year ago. This allowed us to lower our net loss both on a sequential and year-over-year basis, and we remain on track to deliver continued bottom-line improvement throughout 2009.”
Jones Soda president and CEO, Joth Ricci, features as the cover story interview for the next issue of Beverage Innovation magazine.
Source: Jones Soda Co
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