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Jones Soda Co. Reports Fiscal 2017 Third Quarter Results

SEATTLE, Nov 09, 2017 (BUSINESS WIRE) --

Jones Soda Co. (the Company) (OTCQB:JSDA), a leader in the craft soda category and known for its unique branding and innovative marketing, today announced results for the third quarter ended September 30, 2017.

"While we have had a challenging year due primarily to the loss of our Jones 12-ounce can listing, we are very excited by the growth of two of our newer initiatives, Lemoncocco and our Jones Cane Sugar fountain program. During 2017, we have added over 1,000 new retail doors for Lemoncocco including 2 divisions of Whole Foods as well as Safeway NorCal, Raley's and the Mariano's grocery chain in Chicago. Lemoncocco represents the Company's diversification into lower calorie, natural beverages, to better meet changing consumer beverage trends. Equally exciting, our Fountain revenue grew by 200% for the nine month period as we continue to land increasingly larger sized quick service restaurants and accounts," stated Jennifer Cue, the Company's CEO.

For the third quarter of 2017, the Company reported revenue of $3.6 million, compared to the prior year's third quarter revenue of $4.1 million. The Company reported a net loss for the third quarter of 2017 of $211,000 or ($0.01) per share, compared to a net income of $69,000 or $0.00 per share, for the third quarter of 2016.

Third Quarter Review - Comparison of Quarters Ended September 30, 2017 and 2016

-- Revenue was approximately $3.6 million compared to $4.1 million for the prior year.

-- Gross margin was 24.6% of revenue, compared to 27.0% last year.

-- Net loss was $211,000 or ($0.01) per share, compared to net income of $69,000 or $0.00 per share, last year.

Year-to-date Review - Comparison of Nine Months Ended September 30, 2017 and 2016

-- Revenue was approximately $11.1 million compared to $12.7 million for the prior year.

-- Gross margin was 25.3% of revenue, compared to 26.5% last year.

-- Net loss was $463,000 or ($0.01) per share, compared to a net income of $53,000 or $0.00 per share, last year.

The declines in revenue are attributable to increased competition in the craft soda segment at grocery, as well as, the de-listing of our Jones 12-ounce cans by a major retailer in favor of their own competing private label product.

Company Announces New Head of Sales

On November 8, 2017, the Company announced Steve Gress as the new Executive Vice President of U.S. Sales. Mr. Gress is a respected veteran of the industry with over 20 years of distribution and beverage experience, and a strong track record of building brands from their early stages. Mr. Gress will be focused on building our Lemoncocco brand throughout the U.S. as well as managing the opportunities for our Jones Cane Sugar Soda brand in the craft soda category.

Conference Call

The Company will discuss its results for the quarter ended September 30, 2017, on its scheduled conference call today, November 9, 2017, at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). This call will be webcast and can be accessed by visiting the Investor section of the Company's website at www.jonessoda.com. Investors may also listen to the call via telephone by dialing (719) 457-0349 (conference ID: 1173807). In addition, a telephone replay will be available by dialing (412) 317-6671 (conference ID: 1173807) through November 16th, 2017, at 11:59 p.m. Eastern time.

Presentation of Non-GAAP Information

This press release contains disclosure of the Company's Adjusted EBITDA, which is a not a United States Generally Accepted Accounting Principle ("GAAP") financial measure. The difference between Adjusted EBITDA (a non-GAAP measure) and Net Loss (the most comparable GAAP financial measure) is the exclusion of interest expense, income tax expense, depreciation and amortization expense and stock-based compensation. We have included a reconciliation of Adjusted EBITDA to Net Loss in our Non-GAAP Reconciliation in this press release. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP. Adjusted EBITDA has certain limitations in that it does not take into account the impact of certain expenses to our consolidated statements of operations. In addition, because Adjusted EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA provides useful information to investors about the Company's results attributable to operations, in particular by eliminating the impact of non-cash charges related to stock-based compensation, amortization and depreciation that is consistent with the manner in which we evaluate the Company's performance. These adjustments to the Company's GAAP results are made with the intent of providing a more complete understanding of the Company's underlying operational results and provide supplemental information regarding our current ability to generate cash flow. This non-GAAP financial measure and is not intended to be considered in isolation or as a replacement for, or superior to net (loss) as an indicator of the Company's operating performance, or cash flow, as a measure of its liquidity. Adjusted EBITDA should be reviewed in conjunction with Net Loss as calculated in accordance with GAAP.

About Jones Soda Co.

Headquartered in Seattle, Washington, Jones Soda Co.(R) (OTCQB: JSDA) markets and distributes premium beverages under the Jones(R) Soda, Jones Zilch(R), Jones Stripped(TM) and Lemoncocco (R) brands. A leader in the premium soda category, Jones Soda is known for its variety of flavors, made with cane sugar and other high quality ingredients and incorporating always-changing photos sent in from its consumers. The diverse product line of Jones offers something for everyone - pure cane sugar soda, zero-calorie soda and Lemoncocco (R) non-carbonated premium refreshment. Jones Soda is sold across North America in glass bottles, cans and on fountain through traditional beverage outlets, restaurants and alternative accounts. For more information, visit www.jonessoda.com or www.myjones.com or www.drinklemoncocco.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. Forward-looking statements include all passages containing words such as "will," "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 or implied in the forward-looking statements. Factors that could affect the Company's actual results include, among others: its ability to successfully execute on its operating plans for 2017; consumer response to and market acceptance of 7-Select(R) ,the Company's cobranded product with 7-Eleven, and the Company's new product, Lemoncocco; the timing and amount of reorders for 7-Select(R); competition in the fountain business, particularly from Coke and Pepsi; the Company's ability to maintain and expand distribution arrangements with distributors, independent accounts, retailers or national retail accounts; its ability to manage operating expenses and generate sufficient cash flow from operations; its ability to increase revenues and achieve case sales goals on reduced operating expenses; its ability to effectively manage and grow international distribution and sales; its ability to develop and introduce new products to satisfy customer preferences; its ability to market and distribute brands on a national basis; changes in consumer demand or market acceptance for its products; its ability to increase demand and points of distribution for its products or to successfully innovate new products and product extensions; changes in pricing and SKUs of its products;its ability to maintain relationships with co-packers; its ability to maintain a consistent and cost-effective supply of raw materials; its ability to maintain brand image and product quality; its ability to attract, retain and motivate key personnel; the impact of currency rate fluctuations; its ability to protect its intellectual property; the impact of future litigation; the impact of intense competition from other beverage suppliers; and its ability to access the capital markets for any future equity financing, and any actual or perceived limitations by being traded on the OTCQB Marketplace. More information about factors that potentially could affect the Company's operations or financial results is included in its most recent annual report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission on March 23, 2017. 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, the Company 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 STATEMENTS OF
                                                                                                                                   OPERATIONS
                                                                                                                                   (Unaudited)
 
                                                                               Three months ended September 30,                                                             Nine months ended September 30,
                                                                        -------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------
                                                                                      2017                              2016                                                 2017                                   2016
                                                                        --------------------------------                     --------------------------------                     --------------------------------                     ------------------------------------------
                                                                                                                                                            (In thousands, except share data)
Revenue                                                                                    $      3,648                                         $      4,083                                         $     11,116                                         $               12,661
Cost of goods sold                                                             2,749                             2,982                             8,303                                       9,302
                                                                        -------------------- ----------                      -------------------- ----------                      -------------------- ----------                      -------------------- --------------------
   Gross profit                                                                                     899                                                1,101                                                2,813                                                          3,359
      Gross profit %                                                                              24.6%                                                27.0%                                                25.3%                                                          26.5%
                                                                                                                                                                                                                                                             
Operating expenses:
   Selling and marketing                                                                            588                                                  515                                                1,680                                                          1,562
   General and administrative                                                    474                               499                             1,505                                       1,650
                                                                        -------------------- ----------                      -------------------- ----------                      -------------------- ----------                      -------------------- --------------------
                                                                               1,062                             1,014                             3,185                                       3,212
                                                                        -------------------- ----------                      -------------------- ----------                      -------------------- ----------                      -------------------- --------------------
Income (loss) from operations                                                                     (163)                                                   87                                                (372)                                                            147
Interest expense                                                                                   (22)                                                 (18)                                                 (57)                                                           (61)
Other income (expense), net                                                     (20)                                                    9                              (13)                                         (8)
                                                                        -------------------- ----------                                           ----------                      -------------------- ----------                      -------------------- --------------------
Income (loss) before income taxes                                              (205)                                                   78                             (442)                                          78
                                                                        -------------------- ----------                                           ----------                      -------------------- ----------                      -------------------- --------------------
Income tax expense, net                                                          (6)                               (9)                              (21)                                        (25)
                                                                        -------------------- ----------                      -------------------- ----------                      -------------------- ----------                      -------------------- --------------------
Net income (loss)                                                                          $      (211)                                         $         69                                         $      (463)                                         $                   53
                                                                        ==================== ==========                      ==================== ==========                      ==================== ==========                      ==================== ====================
                                                                                                                                                                                                                                                             
Net income (loss) per share - basic                                                        $     (0.01)                                         $       0.00                                         $     (0.01)                                         $                 0.00
Net income (loss) per share - diluted                                                      $     (0.01)                                         $       0.00                                         $     (0.01)                                         $                 0.00
Weighted average basic common shares outstanding                                             41,449,373                                           41,320,214                                           41,409,512                                                     41,316,951
Weighted average diluted common shares outstanding                                           41,449,373                                           41,740,407                                           41,409,512                                                     41,985,418
 
 
                                                                                             JONES SODA CO.
                                                                                  CONDENSED CONSOLIDATED BALANCE SHEETS
 
                                                                                                          September 30, 2017                December 31, 2016
                                                                                                                       -------------------------------                     ------------------------------
                                                                                                                                 (Unaudited)
                                                                                                                                                (In thousands, except share data)
                                              ASSETS
Current assets:
   Cash and cash equivalents                                                                                                              $       745                                         $      733
   Accounts receivable, net of allowance of $17 and $13                                                                                         1,873                                              2,174
   Inventory                                                                                                                                    2,286                                              1,850
   Prepaid expenses and other current assets                                                                                   149                             142
                                                                                                                       -------------------- ---------                      -------------------- --------
      Total current assets                                                                                                                      5,053                                              4,899
Fixed assets, net of accumulated depreciation of $564 and $922                                                                                     43                                                 25
Other assets                                                                                                                     8                               8
                                                                                                                       -------------------- ---------                      -------------------- --------
Total assets                                                                                                                              $     5,104                                         $    4,932
                                                                                                                       ==================== =========                      ==================== ========
                  LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                                                                       $     1,953                                         $    1,049
   Line of credit                                                                                                                                 925                                              1,205
   Accrued expenses                                                                                                                               596                                                835
   Taxes payable                                                                                                                                    5                                                 26
                                                                                                                                            ---------                                           --------
      Total current liabilities                                                                                                                 3,479                                              3,115
Deferred rent                                                                                                                                      12                                                 12
Shareholders' equity:
   Common stock, no par value:
   Authorized -- 100,000,000; issued and outstanding shares -- 41,449,373                                              53,818                                             53,772
   shares and 41,340,727 shares, respectively
   Additional paid-in capital                                                                                                                   8,796                                              8,674
   Accumulated other comprehensive income                                                                                                         322                                                219
   Accumulated deficit                                                                                                    (61,323)                        (60,860)
                                                                                                                       -------------------- ---------                      -------------------- --------
         Total shareholders' equity                                                               1,613                           1,805
                                                                                                                       -------------------- ---------                      -------------------- --------
Total liabilities and shareholders' equity                                                                     $     5,104                                         $    4,932
                                                                                                                       ==================== =========                      ==================== ========
 
 
                                                                                                                             JONES SODA CO.
                                                                                                                         NON-GAAP RECONCILIATION
                                                                                                                                   (In
                                                                                                                               thousands)
 
                                                                Three months ended September 30,                                                                   Nine months ended September 30,
                                                   ------------------------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------------------
                                                                         2017                                   2016                                                       2017                                   2016
                                                   ------------------------------------------------                     ---------------------------                     ------------------------------------------------                     ---------------------------
GAAP net loss                                                         $  (211 )                                                            $    69                                         $  (463 )                                                            $    53
Stock based compensation                                                   43                                                                   71                                             122                                                                  148
Interest expense                                                           22                                                                   18                                              57                                                                   61
Income tax expense, net                                                     6                                                                    9                                              21                                                                   25
Depreciation and amortization                            4                              4                            9                             12
                                                   -------------------- ----- --------------------                      -------------------- -----                      -------------------- ----- --------------------                      -------------------- -----
Non-GAAP Adjusted EBITDA                                              $  (136 )                                                            $   171                                         $  (254 )                                                            $   299
                                                   ==================== ===== ====================                      ==================== =====                      ==================== ===== ====================                      ==================== =====
 

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View source version on businesswire.com: http://www.businesswire.com/news/home/20171109006465/en/

SOURCE: Jones Soda Co.

Jones Soda Co. 
Max Schroedl, 206-624-3357 
Chief Financial Officer 
finance@jonessoda.com

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