Jones Soda Co. JSDA announced its financial results Wednesday for the third quarter ended Sept. 30, 2024. disclosing revenue of $4.2 million, compared to $4.5 million in the same period of 2023. The Seattle-headquartered THC-infused soda maker noted that the third-quarter revenue includes approximately $800,000 in revenue from its Mary Jones business compared to approximately $220,000 in the third quarter of 2023.

The company attributes the decline in revenue to a reduced sales volumes as a result of a Canadian distributor’s transition and loss of a discount retail customer in the U.S. Additionally, the ramp up of HD9 distributors has taken longer than expected.

“Our third quarter did not meet our internal expectations, and we have taken immediate action to correct our trajectory,” stated Paul Norman, chairman of the noard and interim chief executive and financial officer of Jones. “The third quarter results were negatively impacted by a Canadian distributor transition, the loss of a discount retail customer in the U.S., and a slower than expected ramp up with our HD9 distribution network. In addition, we incurred more operating expenses than we had initially budgeted. We have taken corrective actions to improve and align our cost structure, adjust our Canadian distribution model and have added more HD9 distributors in the fourth quarter.”

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Q3 Financial Highlights

• Gross margin was 21.2% compared to 32.9% in the prior year quarter. This decrease was primarily driven by a one-time trade spend adjustment associated with a distributor transition in Canada as well as an unfavorable product mix.
• Net loss was $2.6 million, or $(0.02) per share, compared to a net loss of $900,000 or $(0.01) per share. The increase in net loss was primarily attributable to a decline in gross profit combined with an increase in total operating expenses to support the company’s growth plans.
• Adjusted EBITDA was a loss of $2.2 million compared to a loss of $900,000.
• Total operating expenses were $3.5 million compared to $2.4 million in the year-ago period. The increase was primarily a result of increased spending on product innovation and the associated marketing initiatives to support the company’s product expansion. Additionally, the company did incur a higher amount of legal expenditures related to its Mary Jones business than it did one year ago.
• At Sept. 30, 2024, cash and cash equivalents totaled $2.7 million compared to $1.5 million at June 30, 2024, and $3.9 million at Dec. 31, 2023. The increase in cash and cash equivalents compared to the second quarter of 2024 was primarily a result of the company successfully raising $3.7 million in net proceeds through a private placement in August 2024.

Additionally, Jones Soda announced that on Nov. 12, 2024 the board of directors appointed Paul Norman as the company’s interim chief financial officer, replacing Ronald Dissinger, who had served as interim chief financial officer since the resignation of Joe Culp on Nov. 4, 2024.

Price Action

Jones Soda shares closed Wednesday’s market session 2.44% lower at 20 cents a share.

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Photo: Benzinga edit of images by Matthew Brodeur on Unsplash and Jones Soda