Reed’s, Inc. Announces Third Quarter 2009 Financial Results

Company Completes Bottling Plant Upgrade and Begins Private Label Sales

LOS ANGELES, CA–(Marketwire – November 13, 2009) – Reed’s, Inc. (NASDAQ: REED), maker of the top-selling sodas in natural food stores nationwide, today announced its financial results for the third quarter ended September 30, 2009. Third Quarter and Nine Month 2009 Highlights: — Sales for the quarter ended September 30, 2009 were $4,027,000, a decrease of 5%, as compared to the prior year same period amount of $4,233,000. Sales for the 2009 nine month year-to-date period were $11.7 million, compared to $12.4 million in 2008; — Year-to-date EBITDA loss reduced to $129,000 versus an EBITDA loss of $2,141,000 in 2008 (see table); — Working capital increased to $1.5 million at 09/30/09, from $600,000 at 12/31/08; — Continued to maintain a much lower cost structure in 2009, than in 2008, covering both operating expenses and per-unit product costs; — Nine months gross 2009 profit margin consistent with prior year at 25% of sales; — Loss from operations during the nine months ended September 30, 2009 was $1,454,000 including non-cash impairment write downs on fixed assets of $641,000. Before impairment losses, the net loss from operations is $813,000, an improvement from the loss of $2,457,000 in the 2008 year period. Loss from operations in the three months ended September 30, 2009 was $280,000 mostly due to lower revenues with fixed plant costs, affecting margins. Additional Highlights: — Completed $300,000 brewery upgrade — Began private label production and sales to national accounts — Announced significant new distribution relationship in the Northeast — Expanded Reed’s and Virgil’s presence in over 300 A&P stores nationwide — Expanded Reed’s and Virgil’s into another 100 plus Weis Market stores Mr. Chris Reed, Founder, Chairman and CEO of Reed’s, Inc. commented, “Our results for the quarter were impacted by the overall economic environment. In light of the dramatic recessionary climate and the sharp decreases in revenues that some other companies in our space have experienced, we feel that we fared rather well by outperforming the pack. This is a clear testament to our brand loyalty and the fact that we make some of the best natural sodas on the market.” He added, “As a result of the changing environment we have discovered that we have a unique asset which we feel will be of significant long-term benefit to the Company. We can provide our customers with customized private label products. This is something they want and are ready to buy as we have already received commitments from two customers for product in 2010 from the few accounts we initially reached out to. We are now talking with roughly 30 additional customers regarding this private label opportunity and expect to see additional sales shortly.” Reed continued, “An interesting outcome of the private label expansion is that it is resulting in new orders for our branded products as well.” He ended stating, “The private label business has the potential to significantly increase Reed’s revenues over the next several quarters. Our goal is to generate enough private label revenues to direct significant funding to marketing and sales of our core Reed’s and Virgil’s products.” Mr. Jim Linesch, CFO of Reed’s, Inc. stated, “Our financial results reflect our continued reduction in operating costs, as compared to the prior year period. While sales have fallen during this adverse economic period affecting the grocery industry, we believe that our customer relationships are expanding and will result in increasing sales of our branded products in 2010.” Mr. Linesch added, “Margins during the third fiscal quarter have remained consistent with earlier fiscal quarters, considering overall sales levels and fixed production costs. As we enter the 4th quarter, the Company is well positioned for an increasing backlog of private label business as well as strong sales increases of our branded product lines in 2010.”