Picksthatmove
The downfall of a cult favourite. Market update on the beverage industry.
Jones Soda, the maker of cult-favourite soft drinks with flavours ranging from Fun, Chocolate Fudge to Mashed Potato, has entered into a Letter of Intent with its rival, Reed’s, to be acquired for a deal worth approximately $10 million. The arrangement is being recognized as a severely discounted deal.
Jones shareholders will receive 4.5 million shares of Reed’s common stock and cash of 0.10 per share, worth about $2.6 million.
Around for 22 years, Jones Soda was profitable for most of its history. By 2007 Jones was struggling due to its failed expansion efforts which came around the time as the economy started experiencing difficulties and the soda maker was seeing a shrinkage in sales.
Jones Soda posted a loss of $1.5 million in the quarter ending September 30th, 2009, ending the quarter with $6 million in cash, down from $11.7 million it had nine months earlier.
Shares of Jones Soda traded the day in a range of 0.48 to 0.73, down 6.90%, closing at 0.54.
Reed’s Inc. (NASDAQ: REED), traded between 1.58 and 1.85, closing down 2.79% at 1.74. Reed announced that it has established a working relationship with Associated Wholesale Grocers. Associated Wholesale Grocers has authorized six SKUs for the Reed's Ginger Brew line and six SKUs for Virgil's Soda line. Associated Wholesale Grocers is a retailer-owned cooperative which serves over 1900 retail member stores and 600 affiliates stores. AWG recorded sales of $6.9 billion in 2008. Reed’s Inc. makes sodas for the natural food markets in the U.S.
Cott Corporation (NYSE: COT) shares of COT traded the day between 6.81 and 7.13, up 3.48% at 7.14. COT hit a 52 week-high last November at 9.39. COT announced its fourth quarter and fiscal year 2009 results, citing a revenue decline for the 2009 fiscal year of 3.1% to $1.6 billion; gross margin as a percentage of sales increased to 15.6% from 11.0%; operating income increased to $97.4 million from a loss of $113.0 million. For the fourth quarter of 2009 revenue increased 3.9% to $386 million, operating income increased to $13.9 million from a loss of $15.6 million. Cott Corporation is a non-alcoholic beverage company operating facilities in the United States, Canada, the United Kingdom and Mexico. Cott markets its non-alcoholic beverage concentrates in over 50 countries around the world.
Celsius Holdings, Inc. (NASDAQ: CELH), traded in the range of 2.93 and 3.20, up 7.38% closing at 3.20. Shares of CELH hit a 52 week-high of 14.00 back in July 2009. Celsius Holdings announced that it has converted its common stock, around $5.1 million of its convertible debt and the remaining preferred shares. CDS Ventures LLC has agreed to convert $4.5 million of the $6.5 million outstanding balance of its convertible debt to common stock. Celsius’
Dr. Pepper Snapple Group Inc. (NYSE: DPS), is a manufacturer and distributor of non-alcoholic beverages in the United States, Canada, Mexico and Caribbean with a portfolio of flavoured carbonated and non-carbonated beverages of brands such as Dr. Pepper, Sunkist soda, 7UP, A&W, Canada Dry, Crush, Squirt, Penafiel, Schweppes and Venom Energy, Snapple, Mott’s, Hawaiian Punch, Clamato, Rose’s and Mr & Mrs T mixers. Shares of DPS traded in the range of 33.25 to 33.85, up 0.54% to 33.65. Dr. Pepper Snapple Group announced that it has completed the licensing of certain brands to PepsiCo, Inc. Under the transaction DPS received a one-time cash payment of $900 million before taxes and other related fees and expenses. Portion of the proceeds were used to reduce its total debt obligations to $2.55 billion, in-line with its target capital structure of approximately 2.25 times total debt to EBITDA after certain adjustments.
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