JSDA Jones Soda Co (QB)

Turnaround Plan Delivers Revenue Growth For Quarter

Jones Soda Co. (the Company) (OTCQB: JSDA), a leader in the premium soda category and known for its unique branding and innovative marketing, today announced results for the third quarter ended September 30, 2013.

Results for the third quarter continue to reflect the efforts of our Turnaround Plan, which was initiated with the change in management in the second half of 2012. These results also reflect investments made during our busier selling season in trade spend, marketing and promotional activities, as well as seasonal sales employees while continuing to work within a reduced and more sustainable general and administrative cost structure.

For the third quarter of 2013, revenues increased by 1% to $4.22 million compared to the prior year quarter of $4.17 million. Net loss increased by 2% to $330,000, or $(0.01) per share, compared to a net loss of $324,000, or $(0.01) per share, for the third quarter 2012.

“Five quarters into our turnaround, I am very encouraged that we delivered revenue growth in the third quarter. In addition, as a result of our ground-breaking marketing initiatives, such as Made in Michigan, we are attracting industry-wide interest in the Jones Soda brand from major retailer and distributor partners,” stated Jennifer Cue, CEO of Jones Soda Co.

Third Quarter Review - Comparison of Quarters Ended September 30, 2013 and 2012

• Revenue increased 1% to $4.22 million, compared to $4.17 million last year.
• Gross margin decreased to 24.0% of revenue, compared to 27.8% of revenue last year.
• Operating expenses decreased 9% to $1.3 million, compared to $1.5 million last year.
• Net loss increased 2% to $330,000, or $(0.01) per share, compared to a net loss of $324,000, or $(0.01) per share, last year.

Year-to-Date Review - Comparison of Nine Months Ended September 30, 2013 and 2012

• Revenue decreased 13% to $11.6 million, compared to $13.3 million last year.
• Gross margin decreased to 25.9% of revenue, compared to 28.4% of revenue last year.
• Operating expenses decreased 38% to $3.8 million, compared to $6.2 million last year.
• Net loss declined 66% to $824,000, or $(0.02) per share, compared to a net loss of $2.5 million, or $(0.07) per share, last year.

Conference Call

The Company will discuss its results for the quarter ended September 30, 2013 on its scheduled conference call today, November 7, 2013 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). This call will be webcast and can be accessed by visiting our website at www.jonessoda.com or www.jonessoda.com/company/jones-press/webcasts. Investors may also listen to the call via telephone by dialing (719) 457-2085 (confirmation code: 6338918). In addition, a telephone replay will be available by dialing (858) 384-5517 (confirmation code: 6338918) through November 14, 2013, at 11:59 p.m. Eastern Time.

About Jones Soda Co.

Headquartered in Seattle, Washington, Jones Soda Co.® markets and distributes its premium beverages under the Jones® Soda, Jones Zilch®, Natural Jones™ Soda and WhoopAss™ Energy Drink brands. A leader in the premium soda category, Jones Soda is known for its variety of flavors, high quality ingredients (including pure cane sugar), and innovative labeling technique that incorporates always-changing photos sent in from its consumers. Jones Soda is sold through traditional beverage retailers in markets primarily across North America. 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. 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 2013; its 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 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; 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; 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, 2012, filed with the Securities and Exchange Commission on March 27, 2013, and in its quarterly reports on Form 10-Q filed in 2013. 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 STATEMENT OF OPERATIONS (Unaudited)         Three months ended September 30, Nine months ended September 30, 2013   2012 2013   2012 (In thousands, except share data) Revenue $ 4,217 $ 4,165 $ 11,600 $ 13,295 Cost of goods sold 3,203   3,009   8,592     9,519   Gross profit 1,014 1,156 3,008 3,776 Operating expenses: Promotion and selling 646 571 1,744 2,848 General and administrative 692   893   2,057     3,303   1,338   1,464   3,801     6,151   Loss from operations (324 ) (308 ) (793 ) (2,375 ) Other income (expense), net 14   9   18     (7 ) Loss before income taxes (310 ) (299 ) (775 ) (2,382 ) Income tax expense, net (20 ) (25 ) (49 )   (73 ) Net loss $ (330 ) $ (324 ) $ (824 )   $ (2,455 )   Net loss per share - basic and diluted $ (0.01 ) $ (0.01 ) $ (0.02 ) $ (0.07 ) Weighted average basic and diluted common shares outstanding 38,622,724 38,545,118 38,561,298 37,698,661     Three months ended September 30, Nine months ended September 30, Case sale data (288-ounce equivalent): 2013 2012 2013 2012 Finished product cases 327,000 292,900 858,000 965,100   JONES SODA CO. CONDENSED CONSOLIDATED BALANCE SHEETS       September 30, 2013 December 31, 2012 (Unaudited) (In thousands, except share data) ASSETS Current assets: Cash and cash equivalents $ 1,162 $ 1,654 Accounts receivable, net of allowance of $34 and $93 2,130 1,742 Inventory 2,787 2,223 Prepaid expenses and other current assets 164   264   Total current assets 6,243 5,883 Fixed assets, net of accumulated depreciation of $1,156 and $1,787 292 497 Other assets 254   640   Total assets $ 6,789   $ 7,020   LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,350 $ 885 Accrued expenses 678 767 Taxes payable 31 45 Other current liabilities 46   54   Total current liabilities 2,105 1,751 Long-term liabilities — other 419 485 Shareholders’ equity: Common stock, no par value: Authorized — 100,000,000; issued and outstanding shares — 38,680,416 and 38,530,416 shares, respectively 52,972 52,867 Additional paid-in capital 7,839 7,590 Accumulated other comprehensive income 402 451 Accumulated deficit (56,948 ) (56,124 ) Total shareholders’ equity 4,265   4,784   Total liabilities and shareholders’ equity $ 6,789   $ 7,020  

Jones Soda Co.Carrie L. Traner, Vice President of Finance206-624-3357ctraner@jonessoda.com