Year end financial results
Urban Juice and Soda Company Ltd UJS
Shares issued 10,737,612 Mar 18 close $2.10
Tue 18 Mar 97 News Release
Mr Peter van Stolk reports:
Consolidated sales for the year ended December 31 1996 were $3,458,701, compared to $4,412,338 for the year ended December 31 1995. Consolidated sales of the company's proprietary brands, Jones Soda and WAZU Natural Spring Water were $2,492,557 or 72% of sales, compared to proprietary brand sales of $634,528, or 14% of sales, for the year ended December 31 1995.
During the past fiscal year, the company completely transformed its sales mix from distribution brands to proprietary brands. In order to concentrate the company's resources on manufacturing and marketing of its own brands in Canada and the US, the company reduced its efforts on its distribution business of licenced and unlicenced brands in the western Canadian marketplace.
Gross profit before delivery and storage on the company's proprietary brands as a percent of total sales was 28.8%, compared to 13.5% for distribution brands. This compares to a gross profit before delivery and storage on Jones and WAZU in their 1995 launch year of 3.9% and 22.4% for the company's distribution brands. The improvement in the gross profit for proprietary brands results from the increasing inefficiencies on production of these brands, especially Jones Soda Co. The decline in the gross profit
per cent for distribution brands is mainly attributable to the company's sale of outdated West End and Lahaina products at below their costs and coincident with the company's streamlining of its distribution business.
The overall gross margin for 1996 was 13.1%, compared to 15.0%, reflecting the lower margins earned on distribution brands as well as the increased expenditures required for delivery of the company brands into the US to a broad number of distributors and from two production facilities in Canada.
Delivery and storage costs should decrease in 1997, as the company concentrates distribution in key markets as well as establishes new production facilities closer to outlying distribution markets in 1997.
Total expenses of $2,874,977 for the year ended December 31 1996 were up from total expenses of $2,218,028 for the year ended December 31 1995 due to development costs and increased expenses as a result of being a brandholder and opening new markets in the US. In addition, during 1996, the company completed a public offering which closed October 2 1996, which incurred additional expenses.
With the closing of the financing, the company's balance sheet is much stronger and the company has the resources to effect a full launch of its brands in the US market. This financing was critical to enable the company to launch Jones and WAZU in its key US markets of New York, California, Toronto and the Pacific Northwest, with the appropriate marketing budget to support the launch of new brands. Subsequent to year end 1996, the company has launched its new flavours, including Vanilla Cola, Rootbeer, Cream Soda FuFu Berry and Blue Bubblegum. Urban is excited by the publicity that its
brands are achieving and Urban looks forward to the full execution of its sales and marketing plan for Jones Soda and WAZU during 1997.
STATEMENT OF EARNINGS
Year ended December 31
1996 1995
Sales
Jones & WAZU $ 2,492,557 $ 634,625
Distribution
brands* 966,144 3,777,713
----------- -----------
Total 3,458,701 4,412,338
Cost of sales
before delivery
& storage
Jones & WAZU 1,774,052 609,698
Distribution
brands 835,757 2,932,435
----------- -----------
Total 2,609,809 3,542,133
Gross profit
before delivery
& storage
Jones & WAZU 718,505 24,830
Distribution
brands 130,387 845,375
----------- -----------
Total 848,892 870,205
Delivery &
storage
(all brands) 397,115 208,625
Gross profit 451,777 661,580
Gross margin 13.1% 15.0%
Selling, general
and admin
expenses 2,874,977 2,218,028
Operating
income (loss) (2,423,200) (1,556,448)
Other income
(expense) (3,052) 79,818
Net income
(loss) $(2,426,252) $(1,476,630)
=========== ===========
Net income
(loss) per
share $ (0.28) $ (0.23) |
