Jones Soda Co. posted revenue of $4.5 million in the third quarter of 2023, compared to $4.8 million in the same period a year ago.
David Knight, the company’s president and CEO, pointed to a decline in its food service channel, along with a decline in sales velocity within its grocery channel.
“While the third quarter was more challenging than originally anticipated, we continued to make noteworthy progress towards profitability and I believe we are setting the stage for encouraging growth initiatives in 2024,” Knight said.
Jones Soda’s cannabis-infused Mary Jones brand generated $220,000 in revenue in the third quarter of 2023, compared to approximately $400,000 in the second quarter of 2023 and $114,000 in the third quarter of 2022.
“Looking at Mary Jones, we grew our cannabis-related revenue by 93% year-over-year as we continue to take market share and launch new products in California,” Knight said. “While our expansion plans have experienced some delays, we were able to launch into the state of Washington by the end of the third quarter and have seen early success there. We currently expect to be up and running in Michigan by the end of the fourth quarter and live in Nevada by early 2024. Our team has been working hard bringing our cannabis-infused flavors to market in different formats, and we expect to announce some exciting new growth initiatives for this business in the coming months.”
Jones Soda’s gross profit as a percentage of revenue increased 600 basis points to 32.9% for the third quarter of 2023, compared to 26.9% in the year-ago period. The company attributed the increase to enhancements in its supply chain, allowing better management of raw material costs, along with continued strategic pricing adjustments.
Jones also reduced operating expenses during the third quarter, citing less general business startup costs and up-front marketing costs associated with the development of the Mary Jones brand.
The company reported a net loss of $0.9 million, or $(0.01) per share, compared to a net loss of $1.7 million, or $(0.02) per share, in the third quarter of 2022. Jones attributed the improvement to the expansion in gross profit margin and a decrease in total operating expenses.
Adjusted EBITDA totaled $(862,000) in the third quarter of 2023, compared to $(980,000) in the third quarter of 2022. Jones cited its gross profit margin expansion and lower total operating expenses for the change.
At Sept. 30, Jones Soda’s cash and cash equivalents totaled $5.2 million, compared to $5.1 million at June 30 and $8.0 million at Dec. 31, 2022.
“I remain confident in our long-term strategic goals for the Jones Soda brand and believe in our ability to unlock significant shareholder value,” Knight said. “Our entire organization has put in a significant amount of work laying the foundation we have today, but we are not settling here. Innovation remains at the forefront of all our strategic initiatives, and we are working harder than ever to further capitalize on growth opportunities across both our core bottled soda business and our Mary Jones business.”
Check out this story on Jones Soda's move into the cannabis arena.