Jones Soda's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Jones Soda Co. (JSDA)

Q2 2012 Earnings Call

August 9, 2012 4:30 PM ET

Executives

Carrie Traner – VP-Finance & Principal Financial Officer

Jennifer Cue – CEO

Analysts

David Cohen – Raymond James

Zoran Minic – Private Investor

Steven Schmitt – Wells Fargo

Walter Gee – Private Investor

Presentation

Operator

Good afternoon ladies and gentlemen, and thank you for standing by. Welcome to the Jones Soda Company’s Second Quarter Fiscal 2012 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session and instructions will be provided at that time. (Operator Instructions) I would like to remind everyone that this conference call is being recorded.

I would now turn the conference over to Carrie Traner, Vice President of Finance for Jones Soda. Please go ahead.

Carrie Traner

Thank you, and good afternoon, ladies and gentlemen. Before we begin, let me remind everyone of the Company’s Safe Harbor disclaimer. Certain portions of our comments today will concern future expectations, plans and prospects of the Company that constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Forward-looking statements include all passages containing verbs such as aims, anticipates, estimates, expects, believes, intends, plans, predicts, will, may, project or targets and negatives of those words and similar words or expressions. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements.

Factors that could affect our actual results include among others those that are discussed under the heading “Risk Factors” in our most recently filed report with SEC including our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and current reports on Form 8-K. Listeners are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this earnings call. Except as required by law, we do not assume any obligation to update the forward-looking statements we make today.

I would now turn the call over to Jennifer Cue, Chief Executive Officer of Jones Soda.

Jennifer Cue

Thank you, Carrie. Good afternoon everyone and thank you for joining us today. Before we begin reviewing the results for the quarter, I’d like to mention how thrilled I am to return to Jones Soda as CEO. Well I returned to the Board in April of this year, I’ve been at the helm about five weeks now and I am working to evaluate all operations with an eye towards generating sustainable top and bottom line growth in the future.

I was previously with Jones Soda from 1995 and basically its inception to 2005, returning last fall for a consulting role as an Interim CFO. One thing that has remained constant since I joined Jones over 15 years ago is that I am a strong believer in the power and potential of this brand and look forward to putting my passion for Jones and my knowledge of the specialty soda industry to work for the long-term future growth of the Company.

Since my return to Jones Soda, I have traveled around Canada and U.S. and personally met with distributors covering our 50% of our network. The level of excitement and enthusiasm from our distributor partners related to the Jones Soda brand is gratifying. We also have an amazing consumer base evidenced by our 960,000 Facebook fans. We witnessed daily the excitement and energy from our fan base from letters that we receive to the continued submissions of photos from our loyal fans to put on our label.

In addition, the continued stream of visitors to our headquarters in Seattle reaffirms the passion that we all feel towards the Jones brand. That said there is still much to be done. As we move forward, we will emphasize a more disciplined approach to growing revenue. At the moment, our primary focus is living within our means. To this end, since the first quarter of the year, our Board of Directors have implemented a comprehensive cost control strategy which is primarily responsible for the year-over-year improvement in our bottom line. I look forward to working with the Board as I further evaluate and implement measures to realize our potential and improve our long-term profitability.

Now I’ll provide a brief review of our second quarter performance, and then Carrie will detail the second quarter financial results. Afterwards, we’ll be happy to take questions.

We are pleased to announce year-over-year improvement in both our top and bottom lines for the quarter. Revenue was up 7% primarily due to increased case volumes. Additionally we had a $1.4 million improvement in net loss driven by our expense reduction initiatives. As I mentioned a few minutes ago, since the first quarter of 2012 we have put into place significant cost reductions, the results of which can be seen from the top line through to the bottom line.

We’ve reduced all of our expense line items by double-digits between the comparable quarters of 2012 and 2011 with an overall operating expense reduction of $1.2 million. This new overhead structures speaks to our commitment to align our cost structure with our available capital and reduce expense expenses that do not directly drive top line sales. I am continuing to assess all aspects of the business to formulate a longer term strategy that will harness the true potential of the Jones Soda brand and create a sustainable business model.

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