JONES SODA CO.

JONES SODA CO.

March 03, 2005 16:21 ET

Jones Soda Co. Announces Record Fourth Quarter and 2004 Year-End Financial Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: JONES SODA

OTC Bulletin Board SYMBOL: JSDA
TSX VENTURE SYMBOL: JSD

MARCH 3, 2005 - 16:21 ET

Jones Soda Co. Announces Record Fourth Quarter and
2004 Year-End Financial Results

SEATTLE--(CCNMatthews - Mar 3, 2005) -

Jones Soda Co. (OTC:JSDA) (TSX VENTURE:JSD)

-- Fourth Quarter Revenues Increased 56% to $6.4 Million --

-- Fiscal Year 2004 Revenues Increased 37% to $27.4 Million --

-- Fourth Quarter EPS of $0.00 vs. a Loss of ($0.01) --

-- Fiscal 2004 EPS Increased 200% to $0.06 vs. $0.02 --

Jones Soda Co. (the "Company" or "Jones") (OTC:JSDA) (TSX VENTURE:JSD),
today announced financial results for the fourth quarter and year ended
December 31, 2004.

Net sales for the fourth quarter of fiscal 2004 increased 56.2% to
$6,404,350 compared to net sales of $4,100,233 for the fourth quarter of
fiscal 2003. Net income was $84,546 or $0.00 per diluted share, versus a
net loss of $198,142, or $(0.01) per diluted share, for the same period
last year.

For the year ended December 31, 2004, net sales increased 36.5% to
$27,449,674 versus net sales of $20,100,864 for the 2003 fiscal year.
Net earnings were $1,330,360, or $0.06 per diluted share, compared with
net earnings of $323,515, or $0.02 per diluted share, for the 2003
fiscal year.

Gross margin for the fourth quarter increased 290 basis points to 35.7%
versus 32.8% in the fourth quarter of last year primarily as a result of
supplier rebates incurred during the period. Operating expenses as a
percentage of sales for the fourth quarter improved slightly to 36.4%
from 36.9% in the corresponding period last year. During the quarter,
the Company incurred additional promotional and selling expenses related
to increases in sales personnel, as well as expenses related to the
launch into Target.

For fiscal 2004, gross margin decreased to 34.8% compared to 35.5% for
fiscal 2003 due primarily to the strengthening of the Canadian dollar
compared to the U.S. dollar and higher fuel costs versus a year ago. For
the year ended December 31, 2004 operating expenses as a percentage of
sales improved to 30.6% compared to 33.7% in the prior year primarily
driven by increased expense leverage on higher sales.

Peter van Stolk, President and C.E.O stated, "Our strong fourth quarter
results represent a nice finish to another great year for our company.
During the quarter we gained meaningful market share in several key
channels of distribution, as we continued to invest in sales and
marketing in order to better capitalize on our positive momentum. We
were particularly pleased with our 56% increase in sales, which was
fueled by robust demand in both our direct store distribution (DSD) and
direct to retail (DTR) businesses, and underscores our growing status in
the marketplace. We believe that we are well-positioned to further build
on our success and look forward to executing our strategic plan aimed at
long-term profitability and increased shareholder value."

"Fiscal 2004 was an important year for our company in many ways," Mr.
van Stolk further commented. "Strategically, we significantly enhanced
our DSD and DTR platform, added new products, flavors and packaging,
leveraged our strong brand across non-beverage categories and
substantially expanded our distribution and growth prospects with our
partnerships with Starbucks (NASDAQ-SBUX) and Target (NYSE-TGT).
Operationally, we continued to streamline our business and generate
meaningful expense leverage, and financially, we increased sales by 37%
and tripled earnings per share for the year. But perhaps most important,
we continued to do what we do best -- bringing energy, excitement and
innovation into the marketplace and making emotional connections with
the consumer."

Mr. van Stolk concluded, "We are extremely proud of what we have
accomplished in fiscal 2004 and our success is directly attributable to
the hard work and dedication of our outstanding team. That said, we
continue to push ourselves and explore ways to further improve our
operations and create additional opportunities for growth. Our momentum
remains strong as we head into the new fiscal year and we are extremely
excited about our prospects for the future."

Headquartered in Seattle, Washington, Jones Soda Co. manufactures its
Jones Soda, Jones Naturals, Jones Energy 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 and brand, 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



JONES SODA CO.
CONSOLIDATED STATEMENT OF OPERATIONS
(Audited - $US)

Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------------------------------
2004 2003 2004 2003
----------- ------------ ----------- -----------

Revenue $ 6,404,350 $ 4,100,233 $27,449,674 $20,100,864

Cost of Goods Sold 4,120,076 2,753,789 17,885,811 12,957,165
------------------ ----------- ------------ ----------- -----------

Gross Profit $ 2,284,274 $ 1,346,444 $ 9,563,863 $ 7,143,699

Gross Margin 35.7% 32.8% 34.8% 35.5%

Licensing Revenue $ 109,234 - $ 109,234 -

Operating Expenses:
Promotion and
Selling 1,598,895 927,771 5,955,645 4,603,219
General & Admin. 674,580 523,828 2,227,225 1,886,510
Dep'n &
Amortization 54,112 56,139 193,223 173,605
Non-cash stock
based
Compensation 4,957 4,957 19,737 113,580
----------- ------------ ----------- -----------
$ 2,332,544 $ 1,512,695 $ 8,395,830 $ 6,776,914
----------- ------------ ----------- -----------

Income (Loss) from
Operations 60,964 (166,251) 1,277,267 366,785

Other (expense)
income 23,582 (31,891) 53,093 (43,270)

Earnings (loss) $ 84,546 $ (198,142) $ 1,330,360 $ 323,515
----------- ------------ ----------- -----------

Earnings (loss) per
share:
Basic $ 0.00 $ (0.01) $ 0.06 $ 0.02
Diluted $ 0.00 $ (0.01) $ 0.06 $ 0.02

Weighted average
number of common
stock:
Basic 20,918,379 20,047,737 20,639,402 19,871,180
Diluted 21,328,539 21,554,974 21,949,001 20,592,917
----------- ------------ ----------- -----------



JONES SODA CO.
CONSOLIDATED BALANCE SHEET
(Audited - $US)
Dec. 31, Dec. 31,
2004 2003
-----------------------------
ASSETS

Current Assets $ 7,118,789 $ 4,099,909
Fixed Assets 682,439 490,273
Intangible Assets 49,444 75,856
--------------- -------------
$ 7,850,672 $ 4,666,038
--------------- -------------


LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities $ 3,339,436 $ 2,151,217
Capital Lease Obligations 113,509 19,712
Deferred Revenue 50,000 100,000
Shareholders' Equity 4,347,727 2,395,109
--------------- -------------
$ 7,850,672 $ 4,666,038
--------------- -------------



The Toronto Venture Exchange has not reviewed and does not accept
responsibility for the adequacy of the content of the information herein.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Jones Soda Co.
    Jennifer Cue, 206-624-3357
    jencue@jonessoda.com