Jones Soda Co. ((JSDA)) has held its Q4 earnings call. Read on for the main highlights of the call.
During the recent earnings call, Jones Soda Co. expressed a mixed sentiment, highlighting significant revenue growth and expansion in product offerings and distribution networks. However, the company also faced challenges with decreased gross profit margins, increased operating expenses, and a larger net loss. Despite these setbacks, there is optimism for future growth potential, as efforts have been made to secure new credit facilities and focus on high-growth areas.
Revenue Growth
Jones Soda Co. reported a notable increase in net revenue, which rose by 15% to $19.1 million in 2024, compared to $16.7 million in the previous year. This growth underscores the company’s ability to expand its market presence and capitalize on consumer demand.
Beverage Segment Growth
The beverage segment was a significant contributor to the company’s revenue, with net revenues reaching $17.8 million in 2024, marking a 15.6% increase over the prior period. This growth reflects the company’s successful strategies in enhancing its beverage offerings.
Hemp-Derived HD9 Products
Jones Soda Co. ventured into the hemp-derived HD9 products market, generating $1.7 million in net revenues during the year. This marks a new revenue stream for the company, as there were no revenues from this segment in 2023.
Distribution Expansion
The company expanded its distribution network to 81 partners, enhancing its reach across 37 states. This strategic move has driven penetration in key national and regional retailers, supporting the company’s growth objectives.
Product Innovation
Jones Soda Co. introduced new products such as Zero Colas and Fiesta Jones, aligning with consumer preferences and health trends. These innovations are expected to strengthen the company’s product portfolio and attract a broader customer base.
Adult Beverage Growth
The Mary Jones business experienced nearly 150% year-over-year growth, with expansion into new states like Missouri. This impressive growth highlights the potential of the adult beverage segment in contributing to the company’s overall success.
New Credit Facility
To support its growth initiatives, Jones Soda Co. secured a new $5 million revolving credit facility. This financial backing is intended to fuel the company’s expansion efforts and strategic investments.
Decreased Gross Profit Margin
The company’s gross profit margin decreased from 29.1% to 21.3%, primarily due to a $1.2 million inventory impairment charge. This decline poses a challenge that the company aims to address through operational improvements.
Increased Operating Expenses
Operating expenses rose significantly to $14 million in 2024 from $9.7 million in 2023, driven by increased marketing and legal expenses. Managing these costs will be crucial for the company’s financial health.
Net Loss Increase
Jones Soda Co. reported a net loss of $9.9 million or $0.09 a share, compared to a net loss of $4.9 million or $0.05 a share in 2023. This increase highlights the financial challenges the company faces amidst its growth initiatives.
Negative Adjusted EBITDA
The company’s adjusted EBITDA was negative $8.7 million, compared to negative $4.6 million, influenced by one-time expenses and increased sales and marketing costs. Addressing these financial metrics will be key to achieving profitability.
Forward-Looking Guidance
Looking ahead, Jones Soda Co. is focusing on core soda, modern soda, and adult beverage categories, aiming for predictable, profitable growth. The company plans to leverage its new $5 million revolving credit facility to support expansion efforts. CEO Scott Harvey and CFO Brian Meadows emphasized operational improvements, cost management, and strategic investments to drive long-term shareholder value.
In conclusion, the earnings call for Jones Soda Co. presented a mixed picture, with notable revenue growth and strategic expansions countered by financial challenges such as decreased profit margins and increased net losses. The company’s forward-looking strategies and secured credit facility suggest a commitment to overcoming these hurdles and achieving sustainable growth.