SodaStream Will Shut West Bank Factory
SodaStream, the Israeli at-home soda machine maker, is closing its controversial West Bank factory as part of a cost-cutting campaign amid poor financial results.
The beverage machine maker cut its 2014 revenue and profit forecasts after reporting a sharp drop in third-quarter earnings and said it would restructure to spur a return to growth.
Sales of SodaStream’s soda machines have been weak in the United States as consumers in the company’s biggest market opt for healthier drinks such as juices and teas over sodas.
“Our third quarter performance was pressured by challenging selling conditions for soda makers and flavors primarily in the U.S.,” Chief Executive Daniel Birnbaum said, adding that performance outside the United States was mixed.
Birnbaum announced a “comprehensive growth plan” meant to return SodaStream to profitable growth.
As part of that plan, the company said it would be shutting down and relocating operations from two facilities into a new plant. It would also discontinue certain beverage makers and flavors at a cost of about $20 million to the company.
The financial impact of those two moves will be spread out from the fourth quarter into 2015.
“We are fully committed to getting the company back on track,” Birnbaum said.
It was reported in July that SodaStream was in talks with an investment firm to be taken private in a deal valuing the company at $828 million.
SodaStream’s shares received a boost last week when it said it would sell some PepsiCo Inc brands such as Pepsi Homemade, that are not sold in stores in a limited test.
SodaStream said third-quarter revenue was $125.9 million, down from $144.6 million a year earlier. net profit was $9.5 million versus $16.4 million a year earlier.
The company lowered its forecast for all of 2014, saying revenue was expected to decrease about 9 percent from $562.7 million in 2013, and profit was expected to drop about 42 percent from $42.0 million in 2013. Previously the company had forecast a 5 percent drop in both revenue and profit from 2013.