Monday, May 08, 2006

Jones Soda transcript

I got a chance to read over the transcript for JSDA's last conference call and it was good. Of course it highlighted the areas in the press release (27% increase in Q1 revenue, 310 basis points improvement in gross margin), and included a q&a section.
The overall theme though was to only put out limited information. They kept their answers short and would not expand in certain topics. For instance they used to break down their sales figures into a little more detail, but not going any further. I'm assuming the reason for this might be because of their Target relationship. They are in discussions regarding the extension of their agreement and it appears that the lack of sales data might have something to do with the discussions.

The highlight was Jones Organics (still makes up a small percentage) and well as the Valentines Day success. They also really improved their balance sheet. The cash position is healthy now (last quarter was a little low). I think they also mentioned a southwest production plant. This will increase costs in the short run, but decrease costs (like transportation) in the long run.

There wasn't really anything exciting about the q&a session. Capex was $21,000 while cash flow from operations was $1,069,000. This will get you a free cash flow of $1,048,000.
The one semi-surprising note was that Jeff Canter (who follows the company) actually had only positive things to say. He seems to rely heavily on cash flow (free cash flow, cash flow from ops), so he really liked this quarter. Here's a quote from him: "I think your free cash flow generated in the quarter was greater than your cumulative free cash flow from 2001 through 2005, and hopefully that's a trend that will continue." He seemed impressed with the results.
Overall it was a good conference call.

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