Jones Soda said yesterday that net sales for its third quarter had jumped 31.6% to US$7,785,054 compared to the third quarter of fiscal 2003.

Net income for the quarter increased 47% to US$404,443, or $0.02 per diluted share.

For the nine months ended September 30, 2004, net sales increased approximately 31.5% to US$21,045,323 compared to US$16,000,631 for the nine months ended September 30, 2003. Net income for the nine months ended September 30, 2004 was US$1,245,814 or US$0.06 per diluted share versus $521,657, or $0.03 per diluted share during the same period a year ago.

Gross margin for the third quarter of 2004 decreased to 34.9% compared to 37.0% for the third quarter of 2003. Operating expenses as a percentage of sales improved to 29.7% during the quarter compared to 31.9% for the corresponding period a year ago.

Peter van Stolk, president and CEO, said: "We are extremely pleased with our third quarter performance, which was primarily driven by robust sales in all of our key markets and continued operating margin expansion. These record results are testament to the ongoing strength of our brand and highlight our growing position in the marketplace. Our positive momentum continues and we remain excited about our prospects for the future."

van Stolk continued: "Once again, we experienced a strong double digit increase in case sales in the quarter with all of our geographic territories posting solid gains. Our core DSD (Direct Store Distribution) business performed very well, both in our newer markets such as the Northeast and Southeast, as well as our more established regions like the Midwest and Western United States and Eastern and Western Canada. We were also very pleased with our direct-to-retail business during the quarter. Our partnerships with Starbucks, Panera Bread and Barnes & Noble continue to exceed our expectations and remain a powerful sales and marketing vehicle for our portfolio of Jones Soda branded products."