US: Jones Soda sees profits plunge despite sales leap

Jones Soda Co. has posted a sharp slide in profit, despite rising sales in the year so far.

The Washington-based soft drinks group said yesterday (2 August) that net income for the first six months of 2007 came in at US$99,039, a huge fall from the $2.3m recorded in the corresponding period a year earlier. The slide came despite a rise in sales for the period to $22.2m from $18.8m in H1 last year.

For the second quarter of the year, sales rose by 29.8% to $13m, while net income plunged to $40,726, or $0.00 per diluted share, compared to $2.3m, or $0.10, in Q2 2006.

"Although our second quarter revenues increased by approximately 30% driven by a double digit sales gain in our core bottle business, our concentrate sales were below plan due to some delays in the launch of our CSD product which negatively impacted our gross margin and profitability," said company president and CEO Peter van Stolk. "While we are disappointed in the initial rollout of our Jones Soda cans we are focused on better managing our CSD manufacturing and distribution process and we remain optimistic about the many long-term growth prospects of this business.

"Looking ahead, we are committed to improving the execution of our CSD business across the board. At the same time, we are in the process of building a stronger organisation that will ensure we are well positioned to capitalise on the many growth opportunities that we believe exist for our expanding portfolio of brands and products."

Van Stolk concluded that the company remains confident that it can capture "meaningful market share" of the CSD industry and to drive increased profitability going forward.

In June, Jones lost its listing in coffee shop chain Starbucks. The company had been present in Starbucks since 2004.