Jones Soda Co. announced results for the third quarter ended September 30, 2011.
Revenue for the third quarter 2011 was $5.0 million compared to revenue of $5.1 million for the third quarter 2010. The Company reported a net loss of $1.7 million, or ($0.05) per share, for the third quarter of 2011, compared to a net loss of $578,000, or ($0.02) per share, for the third quarter 2010.
"Sales of our core products, Jones Soda and WhoopAss Energy Drink, in North America increased 7 percent for the quarter compared to the prior year, which we believe is the result of our strengthened distribution footprint. This increase helped to partially offset the effects to our top-line that resulted in part from the strategy to discontinue underperforming product offerings and focus on our core products," commented William Meissner, president and chief executive officer in a prepared statement. "We are pleased that our strategies to grow our business in our core products coupled with our strategic reinvestment in our sales personnel are taking hold, and we believe we are on track for 2011 to achieve low double digit annual revenue growth in our North American core products compared to 2010. We remain optimistic that demand for our core products will continue as we move into 2012, while operating expense leverage will help create a sustainable business for the long-term with improved bottom line performance."
In the third quarter, revenue decreased 3 percent to $5.0 million, compared to $5.1 million last year, and included a decline compared to the prior year resulting from the discontinuation in the second half of 2010 of underperforming product lines and certain Jones Soda SKU offerings (stock keeping units), initiated in the second half of 2010, of approximately $339,000 of total revenue compared to the prior year period. Partially offsetting this decline was an increase in core product revenue in North America of $315,000 compared to the third quarter a year ago. Core products include WhoopAss Energy Drink and continuing Jones Soda SKU offerings.
Gross profit decreased 15 percent to $1.2 million, or 24 percent of revenue, compared to $1.4 million, or 27 percent of revenue, last year and was negatively impacted by a rise in fuel and logistics costs during the third quarter of 2011 compared to the same period in the prior year.
Operating expenses increased 20 percent to $2.8 million compared to $2.4 million last year, mostly driven by increased selling expenses due to investments in added sales personnel to support the growth strategy.
Net loss was $1.7 million, or ($0.05) per share, compared to a net loss of $578,000, or ($0.02) per share, last year. The prior year period was benefited by a tax refund of $392,000 allowed in 2010 resulting from Canadian operations, which reduced the net loss for the prior year.
For the nine month period, revenue decreased 3 percent to $14.0 million, compared to $14.4 million last year, primarily due to a decline compared to the prior year of $1.2 million resulting from the discontinuation, in the second half of 2010, of underperforming product lines and certain Jones Soda SKU offerings. Partially offsetting this decline was an increase in core product revenue in North America of approximately $1.4 million compared to the same period a year ago.
Gross profit increased 3 percent to $3.6 million, or 26 percent of revenue, compared to $3.5 million, or 24 percent of revenue, last year. Gross profit for the 2010 period was negatively impacted by the write-down of excess GABA inventory totaling $344,000.
Operating expenses increased 9 percent to $8.8 million compared to $8.1 million last year and included a $350,000 charge accrued to the second quarter in connection with the termination of our New Jersey Nets sponsorship agreement in August 2011.
Net loss was $5.2 million, or ($0.16) per share, compared to a net loss of $4.3 million, or ($0.16) per share, last year. The prior year period was benefited by a tax refund of $392,000 allowed in 2010 resulting from our Canadian operations, which reduced the net loss for the prior year.
