Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Jones Soda Co (JSDA, Financial) experienced significant growth in its Mary Jones business, with a 263% increase in revenue year over year, driven by sales in the California dispensary market.
- The company raised $3.7 million through a private placement to support growth initiatives and strengthen its balance sheet.
- Jones Soda Co (JSDA) has strategically built its inventory to support the launch of new product lines, including HD9 beverages.
- The company is focusing on transforming from a craft soda company to a fully-fledged beverage company, with a robust innovation pipeline.
- Pop Jones, a new all-natural prebiotic beverage, has been well received by retailers and is expected to drive growth in the modern soda category.
Negative Points
- Jones Soda Co (JSDA) reported a decrease in net revenue to $4.2 million from $4.5 million in the same quarter of 2023, due to disruptions in Canadian distributor transitions and loss of a discount retailer in the US.
- Gross margin decreased significantly to 21.2% from 32.9% in the prior year, impacted by trade spend adjustments and unfavorable product leaks.
- Operating expenses increased to $3.5 million from $2.4 million in the previous year, primarily due to increased spending on product innovation and marketing.
- The company reported a net loss of $2.6 million, or a negative 2 cents per share, compared to a net loss of $1 million, or 1 cent per share, in the same quarter of 2023.
- Jones Soda Co (JSDA) is currently undergoing management transitions, with both the interim CEO and CFO positions being filled temporarily, which may impact stability and strategic direction.
Q & A Highlights
Q: Can you provide more details on the reasons behind the unexpected softness in sales volume during the third quarter?
A: The decrease in net revenue to $4.2 million from $4.5 million in the previous year was primarily due to disruptions in our Canadian distributor transition, the loss of a discount retailer in the US, and a slower-than-expected ramp-up of HD9 distributors. We are actively addressing these issues by adjusting our sales model in Canada, adding more HD9 distributors, and securing new distribution channels. - David Knight, President, Chief Executive Officer
Q: What corrective actions are being taken to improve financial performance following the disappointing third-quarter results?
A: We are focusing on revenue growth, innovation strategy, cost management, and operational efficiencies. We have clarified product roles within our portfolio, prioritized key initiatives, and are working on improving our cost structure to generate profitable growth in 2025. - David Knight, President, Chief Executive Officer
Q: How is the Mary Jones business performing, and what are the future expectations?
A: The Mary Jones business generated approximately $800,000 in revenue in the third quarter, representing a 263% increase year over year. This growth was driven by re-acceleration in the California dispensary market and the introduction of HC9 products. We expect continued growth in this segment. - David Knight, President, Chief Executive Officer
Q: Can you elaborate on the strategic focus areas for Jones Soda moving forward?
A: We are focusing on three key areas: core soda, modern soda, and adult beverages. Core soda includes traditional formats and new zero-sugar versions. Modern soda involves the Pop Jones initiative, which is gaining traction. Adult beverages include Mary Jones and HD9 beverages, with plans to expand Spike Jones in the US. - David Knight, President, Chief Executive Officer
Q: What is the status of the executive search for a new CEO and CFO?
A: We have initiated an executive search for both roles. In the interim, I am serving as both President and CEO, and we have a strong team in place to maintain alignment with our mission. We are committed to finding leaders who can scale operations and drive growth. - David Knight, President, Chief Executive Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
