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THIS CAME FROM WALLST.NET


Jones Soda pops with record fourth quarter earnings
4/3/2006 3:51:55 PM
By Jacqueline P. Nguyen Associate Editor




Peter van Stolk
Chairman and CEO

Think of Jones Soda Co. (Nasdaq: JSDA Quotes, News, Charts) as an upcoming new age rock group in the influx of the mainstream soft-drink industry.

With simple, clear, long-necked bottles, and black and white photograph labels, the Company’s designer sodas are in stark contrast to the sea of brightly lit aluminum and molded plastics so often found on shelves.

“My view is that Jones is more an experience than just soda,” said the Company’s CEO Peter van Stolk. “Nike isn’t just a shoe company, it’s a company that creates an emotional connection with customers.”

Customer participation is a big part of the Seattle-based Company’s “experience.” Jones accepts photos from its customers, which are sifted through and selected as labels for bottles. According to van Stolk it is the Company’s focus on building customer loyalty that has led to its improving financials.

“We are committed to further building on the powerful emotional connection we have created with consumers and dedicated to
maximizing the many opportunities we believe exist for our brands and products in order to return long-term value to our shareholders,” van Stolk said.

The Company reported record earnings of $580,245, or 3 cents a share for the fourth quarter of 2005, up from earnings of $84,546, or break-even in the fourth quarter of 2004. Revenues for the quarter increased 37 percent to $8.8 million, compared with $6.4 million in the fourth quarter of 2004.

"We are extremely pleased with our fourth quarter results, which were highlighted by robust sales growth,” van Stolk said in a press release. “Our balance sheet is substantially improved with cash exceeding $1,176,000 at year end and zero borrowings against our line of credit” Gross margin for the fourth quarter increased 90 basis points to 36.6 percent versus 35.7 percent in the fourth quarter of 2004.

For 2005, the Company’s earnings remained flat compared with earnings for 2004, at 6 cents a share. However 2005 revenues were up 22 percent to $33.5 million compared with revenues of $27.4 million for 2004.

"During 2005, we successfully executed our strategic plan by taking advantage of early investments in our sales and marketing platform in order to deliver substantial revenue and earnings growth in the back half of the year and better position the company for the future despite substantially increased fuel costs," van Stolk said in a press release."

Among the biggest highlights of 2005 for the company was the listing of its common shares on the Nasdaq Small Cap Market. According to van Stolk, the move up from the Over the Counter Bulletin Board “underscores the progress we have made evolving our business and creating a stronger organization, both financially and operationally.”

Unlike many of its competitors that only employ a direct-store-distribution (DSD) marketing strategy, van Stolk said Jones’ “hybrid system,” which utilizes key retailers such as Starbucks, in addition to DSD provides the Company “with branding equity within these sorts of high profile accounts,” and is a way of bridging an “old way” and a “new way” of going to market with products.

According to van Stolk, consumers are “sort of tired” of the staples in the $66 billion carbonated beverage industry, and are looking for more variety. “We’re well positioned to take advantage of all the trends,” said van Stolk adding that the softening of well-known brands usually “leaves a market open for smaller companies to come in and take a little bit of a very big pie.”

http://www.wallst.net/editorials/article.asp?id=370


Pete