LOS ANGELES, CA–(Marketwire – Nov 14, 2011) – Reed’s, Inc. (
- Revenues during the third quarter of 2011 increased by 18% to 6.4 million from 5.5 million 2010. Branded product sales comprised over 90% of sales and expanded by 19% over the prior year.
- Gross profit increased by 28% in the quarter to $2.0 million, as compared to $1.6 million in 2011. As a percentage of sales, gross profit margin improved to 32% during the third quarter, as compared to 29% in 2010.
- Sales and marketing costs remained unchanged overall during the third quarter, as compared to 2010, resulting in a lowering of the ratio of sales costs to gross revenues to 9% of sales, from 11% in 2010.
- General and administrative expenses, before one-time charges, decreased by approximately 10% during the third quarter, compared to 2010.
- Earnings before non-cash items and finance costs (modified EBITDA) increased to $269,000 during the third quarter, as compared to $32,000 in the prior year period. (See EBITDA table at end of this release for further non-GAAP information).
- Net loss for the quarter was $174,000, or $0.02 per share, compared to a loss of $398,000 a year earlier.
- Working capital at September 30, 2011 was $2.2 million, as compared to $1.8 million at December 31, 2010.
- Expanded distribution by adding key DSD distributors in Nevada, Michigan, Alabama and Louisiana
- New private label partnerships with 2 retail chains in the greater Southeast marketplace
- Completed initial production of Light 55 Calories Reed’s Extra Ginger Brew
- Established a stronger partnership with our largest natural foods distributor (UNFI), which is anticipated to lead continued brand growth for 2011 and beyond
“This is our eighth quarter of significant growth,” stated Chris Reed, Founder, Chairman and CEO of Reed’s Inc. “We believe we will see continued sales growth and increasing margins moving forward for the foreseeable future.”
“Aside from one-time charges during the quarter, our ongoing business earned proforma net income,” stated James Linesch, Reed’s Chief Financial Officer. “We are moving into profitability at these sales levels, as we leverage our operations over a wider business base.”
The Company will conduct a conference call @ 4:15 EST on Tuesday, November 15th to discuss its 2011 third quarter results and outlook for the rest of 2011. To participate in the call, please dial the following number 5 to 10 minutes prior to the scheduled call time 1-877-283-1603. International Callers should dial 512-225-9559. The conference ID is 885913#. Conference Call will be recorded and be available on www.reedsinc.com.
About Reed’s, Inc.
Reed’s, Inc. makes the top selling natural sodas in the natural foods industry sold in over 10,500 natural food markets and supermarkets nationwide. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The Company owns the top selling root beer line in natural foods, the Virgil’s Root Beer product line, and the top selling cola line in natural foods, the China Cola product line. Other product lines include: Reed’s Ginger Candies and Reed’s Ginger Ice Creams. In 2009, Reed’s started producing private label natural beverages for select national chains.
Reed’s products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada, as well as through private label relationships with major supermarket chains. For more information about Reed’s, please visit the company’s website at: http://www.reedsinc.com or call 800-99-REEDS.
Follow Reed’s on Twitter at http://twitter.com/reedsgingerbrew
Reed’s Facebook Fan Page at: http://www.facebook.com/ReedsGingerBrew
SAFE HARBOR STATEMENT
Some portions of this press release, particularly those describing Reed’s goals and strategies, contain “forward-looking statements.” These forward-looking statements can generally be identified as such because the context of the statement will include words, such as “expects,” “should,” “believes,” “anticipates” or words of similar import. Similarly, statements that describe future plans, objectives or goals are also forward-looking statements. While Reed’s is working to achieve those goals and strategies, actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These risks and uncertainties include difficulty in marketing its products and services, maintaining and protecting brand recognition, the need for significant capital, dependence on third party distributors, dependence on third party brewers, increasing costs of fuel and freight, protection of intellectual property, competition and other factors, any of which could have an adverse effect on the business plans of Reed’s, its reputation in the industry or its expected financial return from operations and results of operations. In light of significant risks and uncertainties inherent in forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by Reed’s that they will achieve such forward-looking statements.
For further details and a discussion of these and other risks and uncertainties, please see our most recent reports on Form 10-KSB and Form 10-Q, as filed with the Securities and Exchange Commission, as they may be amended from time to time. Reed’s undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. — FINANCIAL TABLES FOLLOW
|CONDENSED STATEMENTS OF OPERATIONS|
|For the Three and Nine months Ended September 30, 2011 and 2010|
|Three months ended September 30,||Nine months ended September 30,|
|Cost of tangible goods sold||3,970,000||3,583,000||11,053,000||9,034,000|
|Cost of goods sold – idle capacity||405,000||268,000||1,300,000||822,000|
|Delivery and handling expenses||587,000||514,000||1,519,000||1,191,000|
|Selling and marketing expense||570,000||570,000||1,751,000||1,632,000|
|General and administrative expense||867,000||742,000||2,198,000||2,066,000|
|Total operating expenses||2,024,000||1,826,000||5,468,000||4,889,000|
|Income (loss) from operations||1,000||(249,000||)||(90,000||)||(400,000||)|
|Preferred stock dividends||(11,000||)||(12,000||)||(55,000||)||(62,000||)|
|Net loss attributable to common stockholders||$||(185,000||)||$||(410,000||)||$||(649,000||)||$||(883,000||)|
|Loss per share available to common stockholders, basic and diluted||$||(0.02||)||$||(0.04||)||$||(0.06||)||$||(0.09||)|
|Weighted average number of shares outstanding – basic and diluted||10,835,858||10,298,739||10,758,529||10,117,906|
|MODIFIED EBITDA SCHEDULE|
|Three months ended September 30,||Six months ended September 30,|
|Modified EBITDA adjustments:|
|Depreciation and amortization||164,000||160,000||472,000||465,000|
|Stock option and warrant compensation||59,000||35,000||189,000||139,000|
|Other stock compensation for services||45,000||86,000||122,000||170,000|
|Total EBITDA adjustments||443,000||430,000||1,287,000||1,195,000|
|The Company defines modified EBITDA (a non-GAAP measurement) as net loss before interest, taxes, depreciation and amortization, and non-cash expense for securities. Other companies may calculate modified EBITDA differently. Management believes that the presentation of modified EBITDA provides a measure of performance that approximates cash flow before interest expense, and is meaningful to investors.|
|CONDENSED BALANCE SHEETS|
|Trade accounts receivable, net of allowance for doubtful accounts and returns and discounts of $135,000 and $105,000, respectively||2,164,000||1,295,000|
|Prepaid and other current assets||77,000||78,000|
|Total Current Assets||9,308,000||7,150,000|
|Property and equipment, net of accumulated depreciation of $1,586,000 and $1,178,000, respectively||3,606,000||3,650,000|
|Deferred financing fees, net of amortization of $34,000 and $8,000, respectively||55,000||47,000|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Recycling fees payable||147,000||325,000|
|Line of credit||2,789,000||2,038,000|
|Current portion of long term financing obligation||67,000||55,000|
|Current portion of capital leases payable||54,000||39,000|
|Current portion of note payable||–||71,000|
|Total current liabilities||7,072,000||5,320,000|
|Long term financing obligation, less current portion, net of discount of $639,000 and $677,000, respectively||2,254,000||2,268,000|
|Capital leases payable, less current portion||168,000||146,000|
|Commitments and contingencies|
|Series A Convertible Preferred stock, $10 par value, 500,000 shares authorized, 46,621 shares issued and outstanding||466,000||466,000|
|Series B Convertible Preferred stock, $10 par value, 500,000 shares authorized, 80,415 and 85,766 shares issued and outstanding, respectively||804,000||858,000|
|Common stock, $.0001 par value, 19,500,000 shares authorized, 10,859,813 and 10,446,090 shares issued and outstanding, respectively||1,000||1,000|
|Additional paid in capital||22,766,000||21,701,000|
|Total stockholders’ equity||4,504,000||4,142,000|
|Total liabilities and stockholders’ equity||$||13,998,000||$||11,876,000|