Atlantic Beverage profits are hurt by competition

October 29, 1994|By Kim Clark | Kim Clark,Sun Staff Writer

Atlantic Beverage Co. Inc., a Baltimore-based juice distributor, said yesterday lower fruit juice sales in the Mid-Atlantic, and start-up costs associated with expansion of its Flying Fruit Fantasy Fruitshakes division, contributed to sharply lower earnings in its third quarter.

The company said it earned $19,000 on sales of $7 million, in the three months ended Sept. 30, down from earnings of $252,000 and sales of $8.3 million in the same period a year ago.

John Izzo, Atlantic's chief financial officer, said the company, which is the sole distributor in the Baltimore-Washington area for Royal Mistic, Elliott's Amazing Juices, Crystal Geyser and Deer Park brand juices, has been hurt by increased competition in the juice business.

"There have been changing consumer preferences and some of our competitors [such as Snapple and Coca-Cola's new Frutopia brand] have never been quite this strong," Mr. Izzo said, adding that the once-booming fruit juice market may finally have topped out.

"We've grown into a mature market," he said.

He said the company also has invested heavily in dispensing machines for its premade Flying Fruit Fantasy Fruitshakes.

Atlantic Beverage has expanded the number of machines from 46 to about 120 since it bought the distribution rights in April.

The company hopes to install another 50 or so in college cafeterias, hospitals and the like before the end of the year, he said.

In a related matter, the company announced that its board of directors has granted authorization to buy back up to 100,000 shares of its common stock.

Mr. Izzo said the company officials were not happy with the stock price, which closed at $3.75, down 12.5 cents in the Nasdaq national market before the earnings announcement yesterday.

He said he believes the stock price would be more fairly valued at about $5 a share.

"We believe that the company's value is worth more than what the stock is trading for. We wanted to demonstrate our confidence," Mr. Izzo said.

He said the stock could be used in a future acquisition.

Atlantic Beverage, which was founded in 1986, went public last November.

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