Gross Profit
For the quarter ended March 31, 2018, gross profit decreased by $237,000 or 27.8%, to $616,000 compared to $853,000 for the quarter ended
March 31, 2017. For the quarter ended March 31, 2018 gross margin as a percentage of revenue decreased to 21.7% from 24.1% for the quarter ended March 31, 2017, due primarily to escalating freight costs.
Selling and Marketing Expenses
Selling
and marketing expenses for the quarter ended March 31, 2018 were $554,000, an increase of $10,000, or 1.8%, from $544,000 for the quarter ended March 31, 2017. Selling and marketing expenses as a percentage of revenue increased to 19.5%
for the quarter ended March 31, 2018, from 15.4% in 2017. We will continue to balance selling and marketing expenses with our working capital resources. For both the three months ended March 31, 2018 and 2017,
non-cash
expenses included in selling and marketing expense (stock compensation and depreciation) were $17,000, respectively.
General and Administrative Expenses
General and administrative expenses for the quarter ended March 31, 2018 were $539,000, an increase of $56,000 or 11.6%, compared to
$483,000 for the quarter ended March 31, 2017, primarily due to stock compensation costs and
one-time
corporate costs incurred during the quarter. General and administrative expenses as a percentage of
revenue increased to 19.0% for the quarter ended March 31, 2018 from 13.7% in 2017. We will continue to carefully manage general and administrative expenses with our working capital resources. For the three months ended March 31, 2018 and
2017,
non-cash
expenses included in general and administrative expense (stock compensation and depreciation) were $36,000 and $27,000, respectively.
Income Tax Expense
We had $5,000 of
income tax expense for the quarter ended March 31, 2018, compared to $7,000 for the quarter ended March 31, 2017, primarily related to the tax provision on income from our Canadian operations.
We have not recorded any tax benefit for the loss in our U.S. operations as we have recorded a full valuation allowance on our U.S. net
deferred tax assets. We expect to continue to record a full valuation allowance on our U.S. net deferred tax assets until we sustain an appropriate level of taxable income through improved U.S. operations. Our effective tax rate is based on
recurring factors, including the forecasted mix of income before taxes in various jurisdictions, estimated permanent differences and the recording of a full valuation allowance on our U.S. net deferred tax assets.
Net Loss
Net loss for the quarter ended
March 31, 2018 was $469,000 compared to net loss of $197,000 for the quarter ended March 31, 2017 primarily due to timing of certain items and the delisting of our
12-oz.
can business, as discussed
above under Revenue.
Comparison of the years ended December 31, 2017 and 2016
Revenue
For the year ended
December 31, 2017, revenue was approximately $13.3 million, a decrease of approximately $2.3 million, or 14.8% from $15.7 million in revenue for the year ended December 31, 2016. The decrease was primarily driven
by declines in our Jones glass bottle business consistent with downward pressure on the industry and the second quarter
de-listing
of our can business by a national retailer. During 2017 and 2016,
respectively, 23% and 19% of our revenues were from Canada.
30