CANADA: Clearly Canadian losses increase
The soft drinks producer Clearly Canadian Beverage Corporation reported an increase in its losses for the second quarter yesterday, on a fall in sales.
Net loss for the three months ended June 30, 2004 was $793,000 on sales of $3,131,000 compared to net loss of $677,000 on sales of $3,914,000 for the same period in 2003. This represents a decline in sales of $783,000 over the same period in 2003.
Net loss for the six months ended June 30, 2004 was $1,290,000 on sales of $6,065,000 compared to net loss of $1,305,000 on sales of $7,039,000 for the same period in 2003. This represents a decline in sales of $974,000 over the same period in 2003.
The company said it believes that the decline in sales for the period ended June 30, 2004 is attributable to two principal factors. Firstly, the second quarter of 2003 included $507,000 of Reebok product sales, as compared with only $17,000 in the second quarter of 2004.
The decline in Reebok product sales was attributable to Reebok having discontinued its licensing agreement with the company as of December 31, 2003, which resulted in the company depleting its remaining inventories of Reebok products during its sell off period which ended in the second quarter of 2004.
Secondly, during the second quarter, working capital constraints limited the company to supplying its products on orders received, rather than more aggressively selling its brands by funding additional strategic marketing programs that would communicate and provide support in the marketplace for the company's new formulation for brand Clearly Canadian.
"In the second quarter, Clearly Canadian completed initial funding under a bridge loan with Quest Capital Corp., the proceeds of which were used for short-term ongoing operations. We are actively pursuing additional financing to support the Company's operations and to allow for more aggressive marketing and selling efforts including, sales crew drives in key cities and initiating regional and national marketing programs. Upon completion of such financing, the Company may still proceed with a further public offering," said Douglas L. Mason, president and CEO of Clearly Canadian Beverage Corporation.
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