| 234 Ninth Avenue North | T206-624-3357 | |||
| Seattle, WA | F206-624-6857 | |||
| 98109 | www.jonessoda.com | |||
JONES SODA CO. ANNOUNCES SECOND QUARTER FISCAL 2007 FINANCIAL RESULTS
August 2, 2007 | Trading Symbol: | NASDAQ: TSX-V: | JSDA JSD |
Seattle, Washington – Jones Soda Co.(the “Company” or “Jones”) today announced financial results for the second quarter ended June 30, 2007.
| Second Quarter Review | ||
| • | Total case sales of 1,722,795 cases (288 ounce equivalent) compared to 961,000 cases a year ago |
| • | Revenue increased 29.8% to $13.0 million compared to $10.0 million a year ago |
| • | Gross margin decreased to 34.2% versus 38.0% last year |
| • | Diluted earnings per share were $0.00 compared to $0.10 a year ago |
Peter van Stolk, President and CEO stated, “Although our second quarter revenues increased by approximately 30% driven by a double digit sales gain in our core bottle business, our concentrate sales were below plan due to some delays in the launch of our CSD product which negatively impacted our gross margin and profitability. While we are disappointed in the initial rollout of our Jones Soda cans we are focused on better managing our CSD manufacturing and distribution process and we remain optimistic about the many long-term growth prospects of this business.”
Revenue for the second quarter of 2007 increased 29.8% to $13.0 million compared to $10.0 million in the second quarter of 2006. Gross margin for the second quarter decreased to 34.2% versus 38.0% in the second quarter of the prior year. Operating expenses as a percentage of sales for the second quarter increased to 38.4% from 31.1% in the corresponding period in the prior year. The company reported net income of $40,726, or $0.00 per diluted share, compared to net income of $2.3 million, or $0.10 in the second quarter ended June 30, 2006.
“We are pleased to have secured distribution in more than 15,000 new retail locations in a relatively short period of time. Importantly, these new relationships have resulted in increased distribution for our bottles, including shelf space at Wal-Mart and Sam’s Clubs, which contributed to the segment’s recent strong performance,” Mr. van Stolk commented. “Looking ahead, we are committed to improving the execution of our CSD business across the board. At the same time, we are in the process of building a stronger organization that will ensure we are well positioned to capitalize on the many growth opportunities that we believe exist for our expanding portfolio of brands and products. We remain confident in our ability to capture meaningful market share of the $70 billion carbonated soft drink industry and to drive increased profitability in the years ahead.”
About Jones Soda Co.
Headquartered in Seattle, Washington, Jones Soda Co. manufactures its Jones Soda, Jones Pure Cane Soda, Jones Energy, Jones Organics, Jones Naturals, Jones 24C and Whoopass brands and sells through its distribution network in select markets across North America. A leader in the premium soda category, Jones is known for its innovative labeling technique that incorporates always-changing photos sent in from its consumers. Jones Soda is sold through traditional beverage retailers and everywhere you’d never expect to find a soda.
This press release contains forward-looking statements and projections concerning the Company’s plans, strategies, expectations, predictions and financial projections concerning the Company’s future activities and results of operations and other future events or conditions, and are ”forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Words such as “expect,” “believe,” “anticipate,” “may,” “will,” “plan,” “intend,” “estimate,” “could,” and other similar expressions are intended to identify these forward-looking statements. In particular, statements in this release regarding potential growth opportunities, working capital and cash flow management, operational and expense controls, future profitability and results of operations are forward looking. Statements in this press release, and elsewhere, that look forward in time or include anything other than historical information involve risks and uncertainties that may affect the Company’s actual results of operations. These statements by the Company are subject to certain risks, including, among others, future demand for its products, competition from other businesses providing similar products, the ability to maintain profitability and control expenses and the Company’s ability to successfully execute its business strategy. These and other risks and uncertainties are discussed in more detail in the Company’s periodic reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, which are available at the SEC website at www.sec.gov.
(See attached Exhibits)
JONES SODA CO.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited — $US)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||||||||||
| Revenue | $13,012,473 | $10,025,978 | $22,200,512 | $18,786,358 | ||||||||||||||||||||||||||||||||
| Cost of Goods Sold | 8,563,343 | 6,219,655 | 14,235,221 | 11,860,365 | ||||||||||||||||||||||||||||||||
| Gross Profit | 4,449,130 | 3,806,323 | 7,965,291 | 6,925,993 | ||||||||||||||||||||||||||||||||
| Gross Margin | 34.2 | % | 38.0 | % | 35.9 | % | 36.9 | % | ||||||||||||||||||||||||||||
| Licensing Revenue | 47,797 | 146,481 | 193,743 | 284,052 | ||||||||||||||||||||||||||||||||
| Operating Expenses(1): | ||||||||||||||||||||||||||||||||||||
| Promotion and Selling | 3,474,142 | 1,992,670 | 5,832,863 | 4,107,493 | ||||||||||||||||||||||||||||||||
| General & Adm | in. | 1,526,6 | 38 1,124,4 | 30 3,257,8 | 08 | 2,222,016 | ||||||||||||||||||||||||||||||
| 5,000,780 | 3,117,100 | 9,090,671 | 6,329,509 | |||||||||||||||||||||||||||||||||
| Earnings (loss) before interest | ||||||||||||||||||||||||||||||||||||
| & taxes | (503,85 | 3 | ) | 835,7 | 04 (931,63 | 7 | ) | 880,536 | ||||||||||||||||||||||||||||
| Interest income, net | 416,269 | 100,637 | 857,356 | 113,347 | ||||||||||||||||||||||||||||||||
| | ||||||||||||||||||||||||||||||||||||
| Earnings (loss) before income taxes | (87,584) | 936,341 | (74,281) | 993,883 | ||||||||||||||||||||||||||||||||
| Income tax benefit | 128,310 | 1,377,454 | 173,320 | 1,322,454 | ||||||||||||||||||||||||||||||||
| Earnings for the period | 40,726 | 2,313,795 | 99,039 | 2,316,337 | ||||||||||||||||||||||||||||||||
| | ||||||||||||||||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.00 | $ | 0.10 | $0.00 $ | 0.10 | ||||||||||||||||||||||||||||||
| Diluted | $ | 0.00 | $ | 0.10 | $0.00 $ | 0.10 | ||||||||||||||||||||||||||||||
| Weighted average number of common stock: | ||||||||||||||||||||||||||||||||||||
| Basic | 25,771,972 | 22,891,891 | 25,782,275 22,321,479 | |||||||||||||||||||||||||||||||||
| Diluted | 26,385,734 | 22,991,489 | 26,311,619 23,324,830 | |||||||||||||||||||||||||||||||||
| (1) Includes non-cash stock based | ||||||||||||||||||||||||||||||||||||
compensation: | ||||||||||||||||||||||||||||||||||||
| Promotion and selling | $ | 131,084 | $102,530 | $199,088 $ | 218,540 | |||||||||||||||||||||||||||||||
| General and administrative | $ | 194,334 | $150,195 | $334,230 $ | 420,888 | |||||||||||||||||||||||||||||||
| | ||||||||||||||||||||||||||||||||||||
JONES SODA CO.
CONSOLIDATED BALANCE SHEET
($US)
| June 30, 2007 | Dec. 31, 2006 | |||||||
| (unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
| Cash and equivalents | $ | 15,167,271 | $ | 13,905,870 | ||||
| Short-term investments | 15,374,969 | 16,318,510 | ||||||
| Accounts receivable | 5,835,458 | 6,914,422 | ||||||
| Inventory | 7,865,433 | 5,783,067 | ||||||
| Deferred income tax asset | 1,520,000 | 1,507,145 | ||||||
| Prepaid expenses | 1,926,952 | 712,690 | ||||||
| 47,690,083 | 45,141,704 | |||||||
Deferred income tax asset | 3,714,719 | 427,993 | ||||||
Capital assets | 1,580,573 | 756,618 | ||||||
Other assets | 1,277,259 | 1,414,138 | ||||||
Intangible assets | 186,923 | 211,931 | ||||||
| $ | 54,449,557 | $ | 47,952,384 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 6,746,362 | $ | 5,446,953 | ||||
| Current portion of capital lease obligations | 169,279 | 70,471 | ||||||
| Taxes payable | 3,010 | 150,141 | ||||||
| 6,918,651 | 5,667,565 | |||||||
| Capital lease obligations – less current portion | 544,436 | 15,329 | ||||||
Shareholders’ equity | 46,986,470 | 42,269,490 | ||||||
| $ | 54,449,557 | $ | 47,952,384 | |||||
JONES SODA CO.
CONSOLIDATED STATEMENT OF CASH FLOWS
($US)
| Six months ended | Six months ended | ||||||||||
| June 30, 2007 | June 30, 2006 | 2005 | |||||||||
| (unaudited) | (unaudited) | ||||||||||
Cash flows from(used in) operating activities : | |||||||||||
| Earnings for the period | $ | 99,039 | $ | 2,316,337 | |||||||
| Items not involving cash: | |||||||||||
| Depreciation and amortization | 288,728 | 118,983 | |||||||||
| Deferred income taxes | (320,180 | ) | (1,482,934 | ) | |||||||
| Stock based compensation | 533,318 | 639,428 | |||||||||
| Change in assets and liabilities | |||||||||||
| Accounts receivable | 1,078,964 | (1,079,943 | ) | ||||||||
| Inventory | (2,082,366 | ) | 154,665 | ||||||||
| Prepaid expenses | (1,214,262 | ) | (313,274 | ) | |||||||
| Taxes payable | (147,131 | ) | 143,472 | ||||||||
| Accounts payable and accrued liabilities | 1,299,409 | 859,973 | |||||||||
Net cash from (used in) operating activities | (464,481 | ) | 1,356,707 | ||||||||
Cash flows from (used in) investing activities: | |||||||||||
| Sale of short-term investments | 938,770 | — | |||||||||
| Purchase of capital assets | (438,625 | ) | (177,009 | ) | |||||||
| Purchase of intangible assets | — | (160,027 | ) | ||||||||
Net cash from (used in) investing activities | 500,145 | (337,036 | ) | ||||||||
Cash flows from (used in) financing activities: | |||||||||||
| Repayment of capital lease obligations | (44,823 | ) | (59,193 | ) | |||||||
| Proceeds from capital lease obligations | 160,569 | — | |||||||||
| Net proceeds from PIPE | — | 28,113,000 | |||||||||
| Proceeds from exercise of options | 1,109,991 | 688,065 | |||||||||
Net cash from financing activities | 1,225,737 | 28,741,872 | |||||||||
| Net increase in cash and cash equivalents | 1,261,401 | 29,761,543 | |||||||||
| Cash and cash equivalents, beginning of period | 13,905,870 | 1,176,101 | |||||||||
Cash and cash equivalents, end of period | $ | 15,167,271 | $ | 30,937,644 | |||||||
| Supplemental Disclosure of Non-cash financing activities | |||||||||||
| Acquisition of fixed assets | $ | 512,168 | |||||||||
For further information, contact:
Peter van Stolk, Jones Soda Co. Chad Jacobs, Integrated Corporate Relations. Hassan
N. Natha, Jones Soda Co.
(206) 624-3357 orpvs@jonessoda.com (203) 682-8200 or
cjacobs@icr-online.com (206) 624-3357 or hnatha@jonessoda.com
***
The Toronto Venture Exchange has not reviewed and does not accept responsibility for the adequacy of the
content of the information herein.
