Jones Soda Co

Good afternoon, everyone. Thank you for participating in today's conference call to discuss Jones Soda's financial results for the first quarter ended March 31st, 2025. Before we begin, let me 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 and for purpose of the Safe Harbor provision under the Private Security Litigation Reform Act of 1995. Forward-looking statements include all statements containing verbs, such as aims, anticipates, estimates, expects, believes, intends, plans, predicts, will, may, continue, projects, or targets a negative of these words and similar words or expressions. Forward-looking statements are subject to certain risks 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 under Form 10-K, our quality report under Form 10-Q, and our current reports on Form 8-K. In addition, this call concludes discussions of certain non-GAAP measures, including adjusted EBITDA. The most directly comparable gap measures and reconciliations for non-gap measures are available in the earnings release and other documents posted on the company's website under Investor Relations. A telco replay will be available after the call through May 29, 2025, and a webcast replay of today's webinar will also be available for one year via the link provided in today's press release, as well as on the company's website. Now I would like to turn the call over to Joan Sotis, CEO, Scott Harvey. Thank you. You may begin.

Thank you, LaTanya. Good afternoon, everyone, and thank you for joining our first quarter earnings call. First quarter of 2025 was a pivotal and transitional period for Jones, marking the beginning of a strategic turnaround under our new leadership. I'm pleased to say that it's been off to a good start. Overall, the quarter reflected the dedication and discipline of our team, whose efforts have laid strong foundation for the future of Jones and our shareholders. In the first quarter, we were able to address a number of cost-cutting initiatives that are already beginning to pay off. First and foremost, we saw a 20% reduction in our SG&A expenses, driven by the implementation of targeted cost-cutting, enable us to optimize spending, improve operational efficiencies, and prioritize high ROI marketing channels. Secondly, we continue to expand our distributor network and optimize our supply chain, positioning us for a long-term organic and accretive growth. In the first quarter alone, we signed 22 new distributors in all trade classes including convenience channels and our THC business. Thirdly, we continue to innovate to match the needs of our growing consumer base through strategic partnerships such as with Bethesda and continued investment into growing categories such as modern, southern adult beverages. We have positioned Jones at the forefront of trends that are hitting the beverage industry. Following just a couple of months of focused efforts, Jones is now nimbler and leaner, enabling us to quickly meet the needs of the evolving consumer. This focus is part of an overarching strategy to drive sustainable revenue growth, not through one-time pipeline orders, but through consistent consumer-driven demand. Looking ahead, we remain sharply focused on our three core categories, which are core soda, modern soda, and the adult beverage, which will continue to serve as the pillars of Jones. Backed by a strong and trusted brand, rigorous cost discipline, and a loyal and growing consumer base, we are confident that the groundwork we've laid in Q1 will translate into sustainable growth and value creation in the quarters to come. Before I dive into a more strategic growth objectives and recent progress, I'd like to pass the call over to Brian, our CFO, and have him speak on our Q1 financial results. Brian, over to you.

Thank you, Scott, and good afternoon, everybody. Looking at our first quarter results of 25, our net revenue in the first quarter was $4.6 million compared to $5 million compared to the prior year. The decrease in revenue was primarily driven by a one-time pipeline fill we had in the first quarter of 24 in Canada. Q125 included approximately $4.2 million in revenue from the company's beverage segment compared to approximately $4.6 million in the prior period. The beverages segment did, however, see strong growth in its hemp-derived HD9 products during the first quarter of 2025, as such products generated $0.9 million in revenues. This represents our fourth consecutive quarter of a sequential sales expansion in the HD9 segment, which is why we remain excited about the future of our HD9 products for Jones. The company generated $0.4 million in revenue from the cannabis THC segment, which is down 8.3% compared to Q1-24. Looking at gross profit as a percentage of revenue, net revenue was 37.3% compared to 37.8% in the prior period. The decrease is primarily driven by higher trade spend in Q125 compared to the prior period. When we look at COGS as percentage of gross revenue, we see that it was 54% in the first quarter of 25 compared to 57 in the first quarter of 2024. So we had an improvement on COGS. The sole reason for the decline in gross profit margin was due to the higher trade spend in the first quarter, which drove the lower gross profit margin on net revenue. Again, at total operating expenses, they decreased 21% to $2.4 million in the first quarter of 2025, compared to $3 million in the year-ago period. Decrease was driven by strong cost management and supply chain efficiency initiatives implemented by Scott and myself during the initial month of leadership. Our efforts to reduce SG&A and optimize the supply chain have been highly effective. While we are pleased with the progress so far, we see room for additional SG&A reductions. And our focus remains on continuing to unlock additional efficiencies in the quarters ahead. Our next area of focus will be on our cost of goods sold, including freight and warehousing. The net loss for the quarter decreased to $2.9 million for our one cent a share compared to a net loss of $1.1 million or one cent a share in the prior period. The decrease in net loss was primarily driven by the reductions in SG&A expenses, which was partially offset by the lower net sales. Lastly, when we look at adjusted EBITDA, it improved to a 0.6 million loss compared to a 1 million loss in the prior period, or a 39% improvement. Scott and I are targeting further improvements to this metric in the second quarter and the balance of the year. That will require improvements to our quarterly revenues, and margins in addition to continued focus on further reductions in SG&A. In our first few months at the helm, we followed through on our commitment to operational discipline, cash management, and ROI-focused investment high-impact channels. We've already begun to see positive impact of these decisions flow to our bottom line. We very much appreciate the support and hard work from all the Jones team members who have supported these efforts, as well as their supply chain partners. Although there's still much work to be done, the early progress gives us confidence that there's more improvement ahead. With a solid operational foundation and a dedication to accountability, we're setting ourselves up to scale effectively. As we gain traction with key distributors and continue to stabilize our core operations, we're in a strong position to drive revenue growth. Before handing the call back to Scott, I wanted to touch briefly on our balance sheet. Our cash position at the end of the quarter totaled $0.7 million, with working cap over $1 million. In the first quarter, we invested our cash in the accounts receivable and inventory as we strategically build up inventories for both the Pop Jones and Fiesta Jones launches, as well as the preparation for our seasonal increase in our crop soda business. We continue to work with our credits facility provider and our core suppliers to finance this growth in accounts receivable and inventories. We expect the second quarter to allow us to reduce investment in our inventory with the expected seasonal increase in sales and pipeline fill of our new products. Overall, I'm very proud of the progress we've made in these early months and remain focused on continuing to strengthen our position and create long-term value for our shareholders in the quarters ahead. With that, I'll turn the call over to Scott to share an update on our key initiatives and growth strategy. Scott.