US: Losses climb at Jones Soda in FY, replaces CEO
Jones Soda Co. has failed to see a better Q4 performance stem growing losses for its full year in 2008, and has appointed a new CEO.
The Washington-based soft drinks company, which owns its namesake range of soft drinks, said yesterday (12 March) that net losses in the 12 months to the end of December rose to US$15.2m, compared to losses of $11.6m in 2007.
Sales slowed by 10% to $35.9m for the year, against $39.8m a year earlier, while operating losses climbed to $15.4m from $10.9m.
In the year, Jones Soda cut its promotional allowances and slotting fees by 11% on 2007. "Promotion allowance programmes were reduced in the latter part of 2008 due to lower sales volumes and our cost containment measures," the company said.
In the final three months of 2008, however, net losses slimmed to $3.4m, an improvement on Q4 2007 of 68%, as sales inched up by 4% to $6.1m. Operating losses halved, coming in at $3.6m from $7.4m.
The company credited the sales rise in the quarter to the reduction in promotion allowances and slotting fees, although these were partially offset by a 27% decline in case sales.
"The volatile economic conditions that began in earnest last September created a very difficult selling environment during the fourth quarter," said outgoing CEO, Stephen Jones. "Management reacted swiftly to the rapid changes in the market by making further adjustments to our operating platform and cost structure in order to prepare Jones Soda for a successful 2009 and beyond.
"We enter the new year with a leaner infrastructure, a more efficient sales and operating platform, stronger alignment with our key top distributors, and sharpened channel, package & pricing strategies. We are optimistic that the actions we took during 2008 and early 2009 have us in a much better position to deliver improved results in the future, even during these challenging times."
Looking forward, the company conceded that this year will "have its own set of external challenges given the current economic environment", but claimed that it was now "a more productive and leaner organisation, combined with a stronger distribution network".
Separately, Jones Soda said that current COO, Joth Ricci, will replace Stephen Jones as president and CEO from 1 May. Ricci, who joined Jones Soda from Columbia Distribution in January last year, succeeds Stephen Jones, who has held the positions since December 2007. Stephen Jones will remain on the company's board.
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