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Jones Soda Co. Reports Third Quarter 2010 Results

Conference Call

The Company will discuss its results for the quarter ended September 30, 2010 and its business outlook on its scheduled conference call today, November 11, 2010 at 1:30 p.m., Pacific time (4:30 p.m. ET). This call is being webcast and can be accessed by visiting the Investor section of our website at www.jonessoda.com. Investors may also listen to the call via telephone by dialing (201) 689-8470 (confirmation code: 360249). In addition, a telephone replay will be available by dialing (858) 384-5517 (confirmation code: 360249) through November 18, 2010, at 11:59 p.m. Eastern Time.

About Jones Soda Co.

Headquartered in Seattle, Washington, Jones Soda Co. ® markets and distributes premium beverages under the Jones Soda, Jones Pure Cane Soda®, and Whoopass Energy Drink® brands and sells through its distribution network in markets primarily across North America. A leader in the premium soda category, Jones is known for its variety of flavors and innovative labeling technique that incorporates always-changing photos sent in from its consumers. Jones Soda is sold through traditional beverage retailers. For more information, visit www.jonessoda.com or www.myjones.com.

Forward-Looking Statements Disclosure

Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding our long-term growth prospects and our ability to expand market share and return greater shareholder value in the future. Forward-looking statements include all passages containing words such as "aims," "anticipates," "becoming," "believes," "continue," "estimates," "expects," "future," "intends," "plans," "predicts," "projects," "targets," or "upcoming". Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be evaluated by events that will occur in the future. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could affect Jones Soda's actual results include, among others, its ability to successfully execute on its 2010 operating plan; its inability to secure additional financing, including making draw downs under its equity line of credit facility, or to generate sufficient cash flow from operations; its ability to use the net proceeds from future financings, including draw downs under its equity line of credit facility, to improve its financial condition or market value; the impact of the global economic crisis, which has continued to have a greater than expected impact on the Company's business; its inability to increase points of distribution for its products or to successfully innovate new products and product extensions; its inability to establish distribution arrangements with distributors, retailers or national retail accounts; its inability to maintain relationships with its co-packers; its inability to maintain a consistent and cost-effective supply of raw materials; its inability to receive returns on its trade spending and slotting fee expenditures; its inability to maintain brand image and product quality; its inability to protect its intellectual property; the impact of current and future litigation; and its inability to develop new products to satisfy customer preferences and the impact of intense competition from other beverage suppliers. More information about factors that potentially could affect Jones Soda's financial results is included in Jones Soda's most recent annual report on Form 10-K and in the Company’s quarterly reports on Form 10-Q filed with the Securities and Exchange Commission in 2010. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Except as required by law, Jones Soda undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.

JONES SODA CO.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share data)

(Unaudited)

   
Three Months Ended September 30, Nine Months Ended September 30,
2010   2009 2010   2009
 
Revenue $ 5,125 $ 7,156 $ 14,383 $ 21,710
Cost of goods sold 3,575 5,433 10,553 16,486
Write-down of excess GABA inventory   166     210     344     210  
 
Gross profit 1,384 1,513 3,486 5,014
Gross profit % 27.0 % 21.1 % 24.2 % 23.1 %
Licensing revenue 7 19 25 70
Operating expenses:
Promotion and selling 1,109 1,590 3,411 6,151
General and administrative   1,256     1,446     4,685     5,006  
 
  2,365     3,036     8,096     11,157  
 
Loss from operations (974 ) (1,504 ) (4,585 ) (6,073 )
Other income (expense), net   26     (65 )   18     (65 )
 
Loss before income tax (948 ) (1,569 ) (4,567 ) (6,138 )
Income tax benefit, net   370     87     303     88  
 
Net loss $ (578 ) $ (1,482 ) $ (4,264 ) $ (6,050 )
 
Net loss per share, basic and diluted $ (0.02 ) $ (0.06 ) $ (0.16 ) $ (0.23 )
Weighted average basic and diluted common shares outstanding 27,454,593 26,454,729 26,779,630 26,455,293
 
 

 

 

Three Months Ended September 30,

Nine Months Ended September 30,

Case Sale Data (288-ounce equivalent):

2010

2009

2010

2009

Finished products cases

394,800

538,500

1,095,900

1,691,800

Concentrate cases

 

-

   

317,600

   

110,800

   

685,800

 

Total cases

 

394,800

   

856,100

   

1,206,700

   

2,377,600

 
 

JONES SODA CO.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

   
September 30, 2010 December 31, 2009
Assets
Current assets:
Cash and cash equivalents $ 2,562 $ 4,975
Accounts receivable 3,052 2,508
Tax receivable 397 11
Inventory, net 2,711 3,711
Prepaid expenses and other current assets   595     487  
 
Total current assets 9,317 11,692
Fixed assets 358 807
Other assets   414     1,035  
 
Total assets $ 10,089   $ 13,534  
 
 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 1,087 $ 1,397
Accrued liabilities 1,193 1,571
Taxes payable 122 69
Note payable, current portion       125  
 
Total current liabilities 2,402 3,162
Note payable 219
Long-term liabilities — other 2
 
Shareholders’ equity
Common stock, no par value:
Authorized: 100,000,000
Issued and outstanding: 27,695,165 and 26,427,989 shares, respectively 45,133 43,925
Additional paid-in capital 6,388 5,771
Accumulated other comprehensive income 390 418
Accumulated deficit   (44,226 )   (39,961 )
 
Total shareholders’ equity   7,685     10,153  
 
Total liabilities and shareholders’ equity $ 10,089   $ 13,534  




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