–
– Announces Brand Partnerships for the Second Half of 2022 and Provides an Update on the Launch of Mary Jones Cannabis Products –
First Quarter 2022 Financial Highlights vs.
- Revenue increased 58% to
$4.5 million compared to$2.9 million . - Gross profit as a percentage of revenue increased 40 basis points to 27.3% compared to 26.9%.
- Net loss was
$1.7 million , or$(0.02) per share, compared to a net loss of$0.7 million , or$(0.01) per share. - Adjusted EBITDA1 was
$(1.1) million compared to$(0.6) million . Adjusted EBITDA included approximately$0.8 million in cannabis-related expenses during the first quarter of 2022.
Management Commentary
“Our momentum continued into the start of 2022 as we achieved our seventh consecutive quarter of year-over-year revenue growth,” said
“Our core bottled business saw meaningful growth across all major sales channels, which drove our strong revenue results this past quarter. Our sales performance indicates that we have continued to deliver the right flavors to the right customers and I believe we have created a sustainable business with diversified revenue streams. We are also proud to announce several new programs that we worked on throughout the quarter, such as our 7-Eleven National Slurpee Program, which is set to launch later this year, our partnership with Sub Pop Records, which is set to launch in the back half of 2022, and our reintroduction of Lemoncocco that is now live in select stores. I believe our talented sales and marketing teams have positioned
“Within cannabis, we began experiencing delays in the supply chain that led to our decision of postponing our highly anticipated launch of Mary Jones to the second quarter. We used this challenging time as an opportunity to add additional resources to bolster our core operations and prepare for the anticipated high-growth trajectory we are predicted to embark on. We welcomed several highly experienced veterans of the industry to our staff and found premier co-manufacturers, distributors, and emulsification partners to upscale our entire supply chain. We are in the process of introducing best-in-class products to the marketplace, and we felt that we needed world class partners to solidify our operations before doing so. I believe we will be well prepared for our
"Lastly, we announced a signed binding LOI with Simply Better Brands in
“Overall, we believe we are ready to capitalize on the work that we’ve done last quarter, and we are well positioned to achieve sustainable growth for the rest of 2022. We are confident that we will be able to continue to mitigate some of the expected supply chain and inflationary pressures that we can control, and we plan on partially offsetting any increased costs by performing competitive price adjustments to our products. While I believe there is still much work to be done to ensure that we are realizing the full value of our Company to our shareholders, I am confident that we are on the right path towards continued success in establishing
First Quarter 2022 Financial Results
Revenue in the first quarter of 2022 increased 58% to
Gross profit as a percentage of revenue increased 40 basis points to 27.3% for the first quarter of 2022 compared to 26.9% in the year-ago period. The improvement in gross profit margin was primarily driven by incremental price increases to offset higher material and transportation costs, along with the Company’s continued shift to a more favorable product mix.
Net loss for the first quarter of 2022 was
Adjusted EBITDA1 in the first quarter of 2022 was
At
____________
1 Adjusted EBITDA is defined as net income (loss) from operations before interest expense, interest income, taxes, depreciation, amortization and stock-based compensation and is a non-GAAP measure (reconciliation provided below).
Conference Call
Date:
Time:
Toll-free dial-in number: 1-888-256-1007
International dial-in number: 1-323-794-2575
Conference ID: 8273755
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact
The conference call will be broadcast live and available for replay here and via the investor relations section of the Company’s website at www.jonessoda.com.
A replay of the conference call will be available after
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 8273755
Presentation of Non-GAAP Information
This press release contains disclosure of the Company's Adjusted EBITDA, which is not a United States Generally Accepted Accounting Principle (“GAAP”) financial measure. The difference between Adjusted EBITDA (a non-GAAP measure) and Net Loss (the most comparable GAAP financial measure) is the exclusion of interest expense and income, income tax expense, depreciation and amortization expense and stock-based compensation. We have included a reconciliation of Adjusted EBITDA to Net Loss in our Non-GAAP Reconciliation in this press release. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP. Adjusted EBITDA has certain limitations in that it does not take into account the impact of certain expenses to our consolidated statements of operations. In addition, because Adjusted EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. The Company believe that Adjusted EBITDA provides useful information to investors about the Company's results attributable to operations, in particular by eliminating the impact of non-cash charges related to stock-based compensation, amortization and depreciation that is consistent with the manner in which we evaluate the Company's performance. These adjustments to the Company's GAAP results are made with the intent of providing a more complete understanding of the Company's underlying operational results and provide supplemental information regarding our current ability to generate cash flow. This non-GAAP financial measure is not intended to be considered in isolation or as a replacement for, or superior to net loss as an indicator of the Company's operating performance, or cash flow, as a measure of its liquidity. Adjusted EBITDA should be reviewed in conjunction with Net Loss as calculated in accordance with GAAP.
About
Forward-Looking Statements Disclosure
Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all passages containing words such as “will,” “aims,” “anticipates,” “becoming,” “believes,” “continue,” “estimates,” “expects,” “future,” “intends,” “plans,” “predicts,” “projects,” “targets,” or “upcoming.” Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be evaluated by events that will occur in the future. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Factors that could affect the Company's actual results, including its financial condition and results of operations, include, among others: its ability to successfully execute on its growth strategies and operating plans for the future; the Company’s ability to continue to effectively utilize the proceeds from its recent financings, including its recent debenture financings, and from the Company’s recently completed plan of arrangement; the Company’s ability to execute its plans to develop and market THC/CBD-infused and/or cannabis-infused beverages and edibles, and comply with the laws and regulations governing cannabis, hemp or related products, and the timing and costs of the development of these new product lines; the Company’s ability to manage operating expenses and generate sufficient cash flow from operations; the Company’s ability to create and maintain brand name recognition and acceptance of its products; the Company’s ability to adapt and execute its marketing strategies, especially in light of the restrictions caused by the COVID-19 pandemic; the Company’s ability to compete successfully against much larger, well-funded, established companies currently operating in the beverage industry generally and in the craft beverage segment specifically; the Company’s ability to respond to changes in the consumer beverage marketplace, including potential reduced consumer demand due to health concerns (including obesity) and legislative initiatives against sweetened beverages (including the imposition of taxes); its ability to develop and launch new products and to maintain brand image and product quality; the Company’s ability to maintain and expand distribution arrangements with distributors, independent accounts, retailers or national retail accounts; its ability to manage inventory levels and maintain relationships with manufacturers of its products; its ability to maintain a consistent and cost-effective supply of raw materials and flavors and manage the impact of the COVID-19 pandemic and other factors on its supply chain; its ability to attract, retain and motivate key personnel; its ability to protect its intellectual property; the impact of future litigation and the Company’s ability to comply with applicable regulations; its ability to maintain an effective information technology infrastructure, fluctuations in freight and fuel costs; the impact of currency rate fluctuations; its ability to access the capital markets for any future equity financing and to manage the impact that the COVID-19 pandemic may have on the Company’s ability to access capital; the Company’s ability to maintain disclosure controls and procedures and internal control over financial reporting; dilutive and other adverse effects from future potential securities issuances; and any actual or perceived limitations by being traded on the
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed Transaction, Simply Better Brands Corp. (“SBBC”) is expected to file with the
Participants in the Solicitation
This communication is not a solicitation of a proxy from any shareholder of SBBC or the Company. However, SBBC and the Company and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of the Company in connection with the proposed transaction. Information about the directors and executive officers of the Company is set forth in the proxy statement for the Company’s 2022 annual meeting of shareholders, as filed with the
There can be no assurance that the transaction between the Company and SBBC will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Proxy Statement, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. The Canadian Securities Exchange has not in any way passed upon the merits of the proposed transaction, and has neither approved nor disapproved the contents of this news release.
Company Contact:
President and CEO
1-206-624-3357
Investor Relations Contact
1-949-574-3860
JSDA@gatewayir.com
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
Three months ended | |||||||
2022 | 2021 | ||||||
(Unaudited) | |||||||
Revenue | $ | 4,523 | $ | 2,857 | |||
Cost of goods sold | 3,286 | 2,089 | |||||
Gross profit | 1,237 | 768 | |||||
Gross profit % | 27.3 | % | 26.9 | % | |||
Operating expenses: | |||||||
Selling and marketing | 1,143 | 661 | |||||
General and administrative | 1,522 | 756 | |||||
2,665 | 1,417 | ||||||
Loss from operations | (1,428 | ) | (649 | ) | |||
Interest income | 2 | 1 | |||||
Interest expense | (231 | ) | (60 | ) | |||
Other income (expense), net | - | (7 | ) | ||||
Loss before income taxes | (1,657 | ) | (715 | ) | |||
Income tax expense, net | (7 | ) | (4 | ) | |||
Net loss | $ | (1,664 | ) | $ | (719 | ) | |
Net loss per share - basic and diluted | $ | (0.02 | ) | $ | (0.01 | ) | |
Weighted average common shares outstanding - basic and diluted | 77,721,719 | 63,156,112 | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
ASSETS | (In thousands, except share data) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 11,856 | $ | 4,667 | ||||
Accounts receivable, net of allowance of | 3,216 | 2,662 | ||||||
Inventory | 2,907 | 1,923 | ||||||
Prepaid expenses and other current assets | 477 | 358 | ||||||
Total current assets | 18,456 | 9,610 | ||||||
Fixed assets, net of accumulated depreciation of | 222 | 238 | ||||||
Right of use lease asset | 338 | 365 | ||||||
Other assets | 8 | 33 | ||||||
Total assets | $ | 19,024 | $ | 10,246 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,735 | $ | 1,239 | ||||
Accrued expenses | 1,526 | 1,544 | ||||||
Lease liability, current portion | 111 | 109 | ||||||
Taxes payable | 9 | 8 | ||||||
Current portion of convertible subordinated notes payable, net | 2,893 | 92 | ||||||
Current portion of accrued interest expense | - | 55 | ||||||
2022 Financing Proceeds Received, Net of Closing Costs | - | 538 | ||||||
Total current liabilities | 6,274 | 3,585 | ||||||
Net convertible subordinated notes payable, net of current portion | - | 1,778 | ||||||
Lease liability, net of current portion | 237 | 266 | ||||||
Total liabilities | 6,511 | 5,629 | ||||||
Shareholders’ equity: | ||||||||
Common stock, no par value: | ||||||||
Authorized — 100,000,000; issued and outstanding shares — 92,252,188 shares and 67,840,941 shares, respectively | 85,561 | 76,017 | ||||||
Accumulated other comprehensive income | 412 | 396 | ||||||
Accumulated deficit | (73,460 | ) | (71,796 | ) | ||||
Total shareholders’ equity | 12,513 | 4,617 | ||||||
Total liabilities and shareholders’ equity | $ | 19,024 | $ | 10,246 | ||||
NON-GAAP RECONCILIATION
(Unaudited, in thousands)
Three months ended | |||||||
2022 | 2021 | ||||||
GAAP net income (loss) | $ | (1,664 | ) | $ | (719 | ) | |
Stock based compensation | 268 | 53 | |||||
Interest income | (2 | ) | (1 | ) | |||
Interest expense | 231 | 60 | |||||
Income tax expense, net | 7 | 4 | |||||
Depreciation and Amortization | 16 | 25 | |||||
Non-GAAP Adjusted EBITDA | $ | (1,144 | ) | $ | (578 | ) | |
Source:
2022 GlobeNewswire, Inc., source