Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Jones Soda Company Fourth Quarter and Fiscal 2011 Year End Earnings Conference Call [Operator Instructions] I would also like to remind everyone that this conference is being recorded. Now I'd like to turn the call over to Mr. Jim Stapleton, Chief Financial Officer of Jones Soda. Please go ahead, sir.

Thank you, and good afternoon, ladies and gentlemen. Before we begin, let remind everyone of the company's Safe Harbor disclaimer. Certain portions of our comments today will concern future expectations, plans and prospects of the company that constitute forward-looking statements for purpose of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all passages containing verbs such as aims, anticipates, estimates, expects, believes, intends, plans, predicts, projects or targets and negatives of these words or similar words or expressions. Forward-looking statements are subject to certain risk and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. Factors that could affect our actual results include, among others, those that are discussed under the heading Risk Factors in our most recently filed reports with the SEC, including our Annual Report on Form 10-K, our quarterly report on Form 10-Q and current reports on Form 8-K. Listeners are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this earnings call. Except as required by law, we do not assume any obligation to update the forward-looking statements we make today. I'll now turn the call over to Bill Meissner, President and Chief Executive Officer of Jones Soda.

Thank you, and good afternoon, everyone. As you just heard, with me today for the first time is Jim Stapleton, our newly appointed Chief Financial Officer. Jim joined us last week and we are very excited to have him aboard. I am confident that he will provide the strong financial and strategic leadership needed to support Jones Soda's daily operations and long-term growth. Today, I'll begin with a brief review of the operational highlights from the fourth quarter, followed by a recap of the progress we have made in 2011 from repositioning the company in developing a sound business plan and to delivering sustainable growth and improved bottom line results. Jim will then detail the fourth quarter and full year financial results, after which, I'll talk about our plans for 2012, then we'll be happy to take questions. Our fourth quarter top line performance represented a strong finish to a productive year. During which, we showed an accelerated pace towards annual growth, stemming from previous year's revenue decline of 33% in 2010 and 28% in 2009. Revenues for the fourth quarter were up 9%, led by core growth sales of 13%, which follows year-over-year core growth in the previous 3 quarters of 2011. These results are a positive indication that the strategies implemented over the past 18 months are working to solidify and expand the areas of the business where the company has historically had success. Since my arrival in 2010, our goals during this initial phase of the company's turnaround have been clear. First, we shared underperforming product lines and exit legacy sponsorship agreements that were expensive and unproductive, and then to reinvest those savings in building stronger platforms to properly support Jones Soda and the relaunch of our WhoopAss Energy Drink and to build a distribution network that can cover multiple channels of trade. To do this, we've added seasoned sales personnel to the organization, who have brought with them important industry experience in developing brands. We also invested to upgrade our distribution network and to grow our points of distribution with key retailers throughout the U.S. In 2011, we witnessed the early results of our efforts in the year-over-year sales gains of our core product line. However, we believe the more effective measure on return of these investments is the positive change in our distribution footprint and the increase in the number of counties throughout the U.S. where our products can be made available for retailers. When I joined Jones Soda in April 2010, the company covered approximately 33% of the counties in the U.S. During 2010, we increased covered U.S. counties by 38%. And by the end of 2011, we more than doubled the covered counties in the U.S. from when I started. This expansion of coverage in 2011 included distribution of our products to new areas along the East Coast. Today, we cover 100% of the counties in more than 20 states with a growing presence in the remaining 30. Making it easier for consumers across the country to find our products has been an important priority. In addition to increase coverage, our stronger distribution network has improved our position with retailers, and in 2011, led to important chain store wins assortments for Jones Soda. These include Ralphs, Big Y, First TD [ph] , Piggly Wiggly, Wal-Mart Canada, Starbucks Canada and Safeway, to name a few and we are confident that our improved operating performance will open up new opportunities with other key accounts in 2012. On top of the store door growth, our results are also being driven by increased productivity within our existing account base. Nielsen stem [ph] data, which measures retail performance by sales per point of distribution, also known as shelf velocity, continues to show that we lead our premium soda competitors in this area. For the 2011 fourth quarter, we were the #1 ranked premium beverage company in both Food and Food/Drug/Mass combined, beating out the #2 player by 15%. For the fourth quarter of 2011 compared to the fourth quarter a year ago, the Nielsen data shows that our top 10 SKUs have grown 30% average [ph] at U.S. growth for retail and our top 5 SKUs have grown 18%. Improving our sales and distribution platform was the main story from 2011, but not the only one. In keeping with Jones Soda company's long history of bringing innovative new products to market, in October 2011, we introduced a new 16-ounce Jones Soda can developed specifically for the convenience in gas locations. The early results of this product have been very positive, giving us added confidence about the long term potential for our brand in this all-important channel. Historically, we have been focusing the grocery channel, but we believe penetrating the convenience in gas channels is important to our growth success. Next in the product pipeline is an all-natural version of Jones Soda, which we are calling Au Naturel. Today and through the weekend, we have an exhibit at the Natural Products Expo West Show held in Anaheim, California, where we are featuring Au Naturel. This is one of the leading trade shows in the natural, organic and healthy products industry and is attended by thousands of industry professionals. Au Naturel is a product we began innovating shortly after my arrival in 2010, where we stripped down to the bare essentials of soda so that we can provide our consumers a lower calorie, all-natural sparkling beverage. Sweetened with lower amounts of pure cane sugar and organic agave syrup, Au Naturel is only 35 calories per bottle and comes in 3 refreshing flavors: Green Apple, Lemon/Lime and Orange. We plan to roll this out through select natural foods distributors in the second quarter of 2012. Our plan is to incubate this product in the natural foods channel exclusively during the next couple of years. We are focused on having a balanced product portfolio, staying within our core competency of sparkling beverages and concentrating on where we believe the highest profitable growth potential exists so that Jones Soda brand and identity are clear to our team, the trade and our consumers. I'll now turn the call over to Jim, who's going to review the financial results for the quarter and 12 months ended December 31, 2011.

Thanks, Bill. For the fourth quarter, revenue was $3.4 million, an increase of 9% compared to revenue of $3.1 million a year ago. Our revenues in case sales in 2011 reflect a significant turnaround to our business that we implemented in the second half of 2010, this part of our strategic decision to refocus our business on our higher margin core products. Beginning in 2010, we discontinued several of our underperforming non-sparkling product lines, and certain of our underperforming Jones Soda SKUs. The result of this product line and SKU rationalization was a focus on Jones Soda SKUs that we believe have demonstrated strong sales velocity at retail and our relaunched WhoopAss energy drink. As a result, for 2011, we experienced overall increases in revenue and case sales for our core products and we've earned significantly less revenue from these discontinued products and SKUs compared to the prior year. With respect to our core product offerings, we had a 13% increase in revenue in our North American sales in the fourth quarter 2011 compared to a year ago. Offsetting this increase was a full percent decline in revenue compared to the quarter a year ago due to the discontinuation of non-sparkling product lines and underperforming flavors. Revenue this quarter also reflects a $30,000 increase in promotion allowances and slotting fees over the prior year period. Our gross profit percentage this quarter increased to 20% from 18% in the fourth quarter of 2010. Our prior year gross profit was negatively impacted by a $162,000 write-down of excess GABA inventory. Operating expenses for the fourth quarter increased 7% to $2.7 million from $2.6 million last year. This includes an increase in promotion and selling expenses of $263,000 primarily due to added sales personnel to support our growth strategy and an increase in trade promotion and marketing expenses in conjunction with expanding distribution. Offsetting these increases was a decrease in general and administrative expense of $138,000 due to decrease in personnel. Net loss in the quarter ended December 31, 2011, was $2 million, or $0.06 per diluted share compared to a net loss of $1.8 million or $0.06 per diluted share in the 2010 quarter. Prior year period benefited by a tax refund of $392,000, resulting from our Canadian operations, as well as nonrecurring licensing proceeds of $125,000 relating to the sale of our patents in 2010, both of which reduced the net loss in that period. Now to our results for the 12 months of 2011. Revenue was $17.4 million, a decrease of 1% compared to revenue of $17.5 million for the last year. Our full year revenues in case sales in 2011 also reflects significant turnaround to our business I mentioned earlier. Our core product revenue in North America increased $1.8 million or 10% for the year. This increase helped to mitigate the decreases we experienced due to the discontinuation of our non-sparkling product lines and their underperforming SKUs representing a 7% or $1.4 million decline year-over-year. Also contributing to the decrease in revenue was a 3% decline in international sales. Revenue for the 12 months of 2011 reflects a $209,000 increase in promotion allowances and slotting fees over the prior year period. We believe promotion allowances and slotting fees will continue to help drive growth of our core products through our direct store delivery channel in conjunction with our expanding distribution network. Gross profit percentage for the period improved to 25% from 23% as a result of our discontinuation of underperforming product lines, which had a higher cost to produce. Operating expenses increased approximately $872,000 to $11.5 million for the 12 months ended December 31, 2011 compared to operating expenses of $10.7 million a year ago. This increase was due primarily to increases of $1.6 million in promotion and selling expenses due to investments made in sales personnel and marketing expenses. $350,000 of the increase is related to the termination of our sponsorship with the New Jersey Nets that we discussed on last quarter's call. Over the long term, this decision will save us over $7 million in sponsorship fees that would've been paid out from 2017 under contract. Partially offsetting these increases was a decrease in general and administrative cost of approximately $748,000 due to decreases in salaries and benefits, resulting from fewer personnel and a decrease in stock-based compensation, as well as a decrease in professional fees and depreciation expense. Also, general and administrative expenses were favorably impacted due to a loss on disposal of fixed assets in the prior year period. Our net loss for 2011 increased to $7.2 million or $0.22 per share compared to a net loss of $6.1 million or $0.22 per share for the 12 months of 2010. 2010 benefited by a tax refund allowed for our Canadian operations, as well as a nonrecurring licensing proceeds of $125,000 relating to the patent sale, both of which reduced the net loss that period. Turning to our balance sheet. As of December 31, 2011, we had working capital of $3.6 million in cash and cash equivalents of approximately $1.7 million. Cash used by operations during the 12 months ended December 31, 2011, was $5.1 million compared to $3.5 million in the prior period. On February 7, 2012, the company closed a registered direct offering it announced on February 2, issuing 6.4 million shares and warrants to purchase 3.2 million shares. The company received net proceeds of approximately $2.8 million. We believe our current cash and cash equivalents will be sufficient to meet our anticipated net cash needs in support of our operating plan in 2012. To share some of the excitement related to Jones Soda products and the consumer, today I'll provide some nonfinancial metrics that we'll report each quarter. As reported by Facebook, we have 889,058 fans on our Facebook page at the end of 2011. Since inception, consumers have provided Jones with more than 1,140,000 photos for potential bottle labels. In addition, as mentioned by Bill, for distribution, as of the end of 2011, we had 2,148 covered U.S. counties. I will now turn the call back over to Bill.

Thanks, Jim. We begin the new year with positive sales momentum. Thanks to the hard work of our teams and the investments made in the business during 2011, the company is on an improved strategic course for 2012. Over the near term, we are focused on taking advantage of our recent distribution gain and capitalizing on the growing popularity and awareness of our products to grow our market share. At the same time, we'll continue to selectively cultivate our distribution footprint to improve the availability of an increased demand for our products across North America. I don't want to say that the heavy lifting is over because there is plenty of work still to be done to ensure that we can achieve sustainable growth and long term profitability. However, as a result of the meaningful improvements we've made to our operating platform over the past 18 months, we think we can grow revenue at a faster pace than expenses, continuing our movement toward positive territory and deliver full year revenue growth with improved bottom line results compared with 2011. We anticipate a greater percentage of the growth coming in the spring and summer, thanks to the authorizations coming online. The expected revenue growth will be the first time since 2007 that revenues have trended positive. We look forward to updating you on our performance as the year progresses. With that, we'll turn the call back to the operator for questions.

[Operator Instructions] We'll go first to Walter Jean [ph], private investor.

I got a quick question though. My concern is, do you feel that the company's willingness to always wanting to shift different types of labeling on these products, do you think that might be hurting the company from being able to build much more sustainable loyal fans with the young population out there or causing other people to really identify with the product? Because the labeling is always shifting, it's kind of hard for somebody to really identify with the product and stay with it for a long term?

Walter, good question. It goes right to our brand ethos. And right now, what is extremely popular with youth is the concept of user-generated branding and our products are literally what consumers are feeling and seeing everyday. The photo count that Jim had referenced, being over 1 million, what that means is that our products are perpetually relevant. They will, on an ongoing basis, always be showing what is important and new and exciting to our consumer base. And you can't argue with results. Our products continue to grow at retail faster than our competitors who have a much more stayed or consistent label architecture. We are outperforming in 2 ways: One, growth. Just straight growth at retail and measured channels, we are outperforming the category. And then the other one is shelf velocity, which really goes to the heart of your question, is your marketing relevant? Is your marketing resonating? Our sales per point of distribution or velocity leads the premium category in shelf terms, or velocity, with sales per point at distribution. And that's not our data, that's a syndicated data source that the entire industry uses and recognizes. Great question, but we feel really confident that what we're doing with the label architecture is the right thing to do.

We'll go next to Kyle Krueger with Apollo Capital.

Very nice to see the resumption of revenue growth. Bill, can you comment on whether you've seen a continuation of that in the first couple months of the new year?

Kyle, absolutely. We're confident that we're going to deliver full year growth to the point that we rarely state that on these calls, but we're absolutely confident that our methodology, our history has not been to comment mid-quarter with the ebb and flow of various quarters. And I think doing so would put us in a bad precedent. But we are absolutely anticipating full year growth.

Okay. And you mentioned the top, the growth in the top 10 and top 5 SKUs, which was impressive. What percentage of total revenues are the top 5 and 10 SKUs?

Well, so let's go to the data that we referenced. So we referenced U.S. Grocery or the Food Channel measured by AC Nielsen. So that's U.S., which is slightly more than 60% of our business. And then we believe the great majority of the U.S. business is indeed grocery. So it would represent something probably in or around 50%. But I'm taking some liberal estimates there.

Okay. And what about -- any upcoming conferences, investor conferences that you will be attending or any possibility of additional Wall Street research or sponsorship for you?

Kyle, as a matter of fact, we've got one coming up in a couple of weeks. It's the TAG Conference for Telsey Advisory. It will be in New York and we're speaking on the 29th.

And what about research coverage, Bill?

Well, that's why I'm psyched to have Jim here for. He will be working very hard on finding good coverage for us. He has a history of doing so, he has relationships, he has a process and he's very engaged. Do you want to comment on that?

All right. I appreciate the question. And as Jones expands the product offerings and the retail distribution footprint, we have the opportunity to garner that coverage. And so as much as it would have been great to come in and have coverage there, we have the opportunity to earn it as we continue the expansion.

I think...

Yes. Okay. And final question for me, when do you expect to file the 10-K?

Prior from -- currently, I think our date, March 30 is when it's due, and we should have it filed prior to that by at least a week.

We'll go next to Henry Dillon with Founders Finance.

Congratulations on the revenue growth for the fourth quarter, my question relates directly to that. Are there certain volume breakpoints with Jones co-packers that, when reached, will allow for greater margin expansion? And if so, how far away approximately is Jones from reaching those? And to what extent do you think they will boost overall margins?

Good question, Henry. I can tell you've spent time in this industry. We have an opportunity with scale and co-pack cost, based on what you might classify as traditional volume opportunities and leverage. The bigger opportunity though to the same issue comes in achieving a scale that allows you to open up another co-packer closer to your end user. The biggest cost impact that we have relating to that is freight. We are shipping today from Toronto to Florida. And at a certain point, your volume grows in the Southeast and mid South, enough to warrant putting a contract manufacturer somewhere that makes sense in that region. And that's where you really begin to see the margin improvement because we ship glass and water, 2 very heavy items. And as we scale, we will see the more drastic gross margin improvement come as a result of developing contract manufacturers closer to the end user and then very much also within the context, I believe with your question, the benefits that come from scale and leverage with our suppliers.

So in your opinion, approximately how far away from reaching those critical points would Jones be currently?

Well, I think [Audio Gap] addition within the next 12 months. And what that would impact is a given region of the country that we're currently shipping from a more distant location. Though it would be a benefit to-- the primary benefit would be seen to one region.

Okay. And secondarily, and not particularly related to the first question. I'm hearing this, about these new brand extensions coming out, the Au Naturel and so forth. And having followed the company for some time, it sounds a little bit familiar to me and it seems a little bit as though we've heard that before. So how do you and the rest of the Jones team avoid the brand dilution and the distractions, and everything that comes with extending Jones out across these multiple products and yet at the same time maintained your focus? Because I know that's been a topic that you've mentioned at multiple points along the way. So how do you do that?

Yes, Henry, and I'm very sensitive to that because I have stated that clearly was one of the biggest issues that got us into trouble in previous regimes. Here's what we're doing, the 16-ounce can is really not a -- another product. It's existing flavors in another price package format, which is exactly what we need to do and continue doing. To the degree that we can innovate and allow us to leverage our brand into new channels is what's going to really make this a different company. Au Naturel is a completely different situation. And I think to the core of your question or what you're really asking, but I did want to draw the distinction between classic price package planning extensions like the 16-ounce can, and Au Naturel. Here's how we're trying -- here's how we think about Au Naturel. We jettisoned all the still beverage categories that we had. There were 5 product lines, 5 somewhat distinct product lines in still beverages that we jettison. We said we're going to be committed to the sparkling category. We have, in Au Naturel, a sparkling product. It is designed to only be sold in the natural foods category. In the natural foods category, we're already being serviced by a channel of distribution that has been developed. 2 large distributors, one called Kaghy [ph], and the other called UNFI. We have established relationships with them, we have salespeople already covering them. We plan to keep this product small and we'll use this word incubation strategy for the next 24 months. We want to be out in front of this opportunity. It is a very unique product. We have a press release coming out. It is a industry-leading product, both technically and from a packaging perspective. So we're very excited about it. We didn't want to pass up on the opportunity. We're keeping it on a confined channel with minimal investment and time against it.

[Operator Instructions] At this time, we'll go next to Scott Carr [ph] private investor.

This question is for Bill. You've been involved in the product development in the past, basically from scratch, I believe, if I got that correctly. And here, you took on Jones Soda, which had existing products and existing company. How has your milestone schedule that you envisioned when you stepped into this? Compare -- how has it progressed, I guess, in terms of your mind? And then how does that compare to the development of products that you had in the past?

That's a great question and a tough one. The acceleration of our distribution and our retail store door acquisition has been faster than anticipated. The reception of our products at retail has been above my expectations as far as bringing Jones back from where it was. The things that are happening slower than anticipated are the actual distribution acquisition of innovation. Though our WhoopAss brand is providing very accretive incremental revenues, is 10X what it was in prior year. But I anticipated the ability to move faster with that product. I would say that, that's a -- that was a different-than-expectation situation. But as far as the Jones Soda itself as a preexisting brand, that's moving quicker than I thought.

So the challenges that you've been to, this as a follow-up here on this one, are any of the challenges [ph] you've run into been similar to that of which you may be encountering with the [indiscernible] and the issues [ph]?

Yes, very similar, if not identical. There's been an evolution in the distribution world and that is the elimination of what might be called a third tier, the distribution network where you don't have a big affiliate brand like a Miller, Coors or an Anheuser-Busch, or Coke or Pepsi. There used to be this group that just had all the emerging brands, and maybe some of the Cadbury or the Snapple brands. And you could go to them and you would be moving quicker with a group like that because you were more important to them. Today's distribution world, you are with very large system wholesalers and distributors and you have to leverage any and all strength you can muster via sales personnel, via great sales data, to make sure that you're getting the appropriate amount of attention. I think that really is the biggest evolution from the Sobe and Fuze days.

Okay. Last question and this will be just a follow-up. How are you guys determining when to raise cash? Is it purely as-needed right now or -- and I guess the follow-up question to that is, at some point, would you worry that the leverage to be able to raise that cash needed may not be there?

Well, I guess that the overriding determining factor in doing so is shareholder value and raising what's necessary to achieve what this company can achieve in minimizing dilution. I think the best reference point for that is this Rodman deal we just did. Would we have liked more? Absolutely. Was more available? Absolutely. But what we are attempting to do is minimize the dilution when cash is available. Jim, do you want to add?

And I think it's being opportunistic when market conditions allow as they did here in February to Bill, to execute a transaction rather quickly and move on. And I think from the history of market conditions, you never know when things -- when that opportunity is going to present itself and it did. I think Bill and my team did a great job in taking advantage of in behalf of the shareholders.

My upside is the same as my shareholders' upside in the long term incentive that I have, and I really believe that the appropriate way, because then I think like a shareholder when it comes to decisions like that.

We'll go next to Ted Supelov with Teamwork Management.

I'm calling from Canada. And as a Canadian consumer and investor with the company, where do you see your brand being positioned in the Wal-Mart stores? I know that was a big chain for you years ago and you're back in there again. The footprint that I have seen in the stores locally in Ontario, andin the trial and within the surrounding GTA doesn't seem very large, if nonexistent. So it just concerns me, for the average purchaser of Jones who may not get into a specialty store to pick it up, they don't have access to it as readily as available as they should.

Yes, well, Ted, we're looking to you. We're looking to Canada to really be a leader for us here in North America. It's really interesting. But one of the first a-ha moments I had in joining the company was-- in Canada, on 1/10 of the population, that revenue base for Jones Soda is about -- well, we'll not be so specific, but it is above 30%. On 1/10 of the population, it represents more than 30% of our total revenue. And to me, that presents fantastic upside for all of North America. So what you're seeing is interesting because we're so much more available in Canada than we are in the U.S. and while we strive to develop this distribution network so broad and deep to try to match what we have up there. The Wal-Mart situation specifically is an excellent note for you because it is minimal right now. But we do know that it is increasing, we have achieved the initial threshold that the company was looking for and we are expanding that in skewed and we're hoping to ultimately get a little bit better shelf position as well.

[Operator Instructions] At this time, we'll take a follow-up from Walter Jean [ph], private investor.

A question that I have is, now the -- I notice the share price for the stock has really took a hit with the past month and it looks like it's been operating below $1 for quite some time now. So are you -- do you guys fear that eventually, you guys might be delisted from the NASDAQ, from the Dow Jones? And then what other long-term prospects to raise capital to keep the company afloat? It looks like every time there's a little capital, you show and sell some stock it's like skewing it and brings about a negative image on the stocks. What's your view on that?

Walter, I'll break that question into 2 parts. From a regulatory perspective, is we disclosed an 8-K and followed it up in our 10-Q for the third quarter. We have a time period [Audio Gap] and I feel confident enough we will receive the opportunity to get the additional 6 months to address the listing deficiency. That's all I can say at this time. And we'll incorporate what takes place there in our 10-K. NASDAQ has given us the time periods and we're going to do our best to make sure we abide by those. As that ties into a capital raise, the real challenge here is timing a capital raise when the market's receptive, and this one is just an example. Opportunity was there, took advantage of it, pricing, probably not what we would have ultimately like compared to some of the price depreciation we saw towards in January. But in terms of doing a placement like that and getting it done quickly, it happened. Will there be future ones like that? I think the future will look different for us. My goal is to try to raise capital from a position of strength when those opportunities come around to benefit shareholders, but at the same time, to give the company the capitalization to take advantage of the inherent strength of the Jones brand. So we'll be opportunistic when those opportunities come about.

And ladies and gentlemen, we have no further questions. At this time, I'd like to turn the conference back to our speakers for any additional or closing remarks.

Thank you everyone. We really appreciate your participation.

Thank you. Ladies and gentlemen, that does conclude today's conference call. We'd like to thank you all for your participation.