Reed's, Inc. (NASDAQ: REED), maker of the top-selling sodas in
natural food stores nationwide, today announced the financial
results for its fiscal year ending December 31, 2011.
Financial Highlights:
- Revenues increased to over $25 million in 2011, a 23% increase
from 2010. The overall revenue increase of $4.6 million was derived
from a $3.3 million increase in branded business and $1.3 million
increase in private label business.
- Our top ten branded SKUs, which drive almost 70% of our
business, grew more than 24% in 2011.
- Overall, gross profit of 30% remained the same vs. 2010,
despite cost increase pressures in 2011.
- Sales and marketing costs increased by 7%, to $2.5 million in
2011. As a percentage of revenues, selling and marketing costs
decreased to 10% in 2011, compared to 11% in 2010.
- General and administrative expenses, before one-time charges of
$327,000, decreased by approximately 7% in 2011, as compared to
2010.
- Earnings before non-cash items and finance costs (modified
EBITDA) increased 83% to $834,000 during 2011, as compared to
$456,000 in the prior year period. (See EBITDA table at end of this
release for further non-GAAP information).
- Net loss for 2011 decreased 28% to $941,000, or $0.09 per
share, compared to a loss of $1,310,000 a year earlier.
- Working capital as of December 31, 2011 increased 44% to $2.6
million, as compared to $1.8 million at December 31, 2010.
Operational Highlights:
- New credit facility obtained, expanding available access to
capital at lower interest rates
- Achieved quality control standard SQF 2000 plant certification
for expanded Private Label capability
- New branded product releases include Flying Cauldron
Butterscotch Cream Soda and Virgil's Dr. Better
- New introduction of Virgil's Sparkling 100% Juices in 3 flavors
and launches in Whole Foods
- New introduction of Reed's Extra 55 Light Ginger Brew, the low
calorie version of our #1 SKU Reed's Extra Ginger Brew
- Strengthened our private label capabilities introducing new Tea
and Sparkling Mineral Water flavors to retail customers, expanding
our current private label brand mix
- Expanded our mainstream DSD distribution model to include Las
Vegas, regions of Michigan, full state of Florida, Arizona,
Louisiana and Georgia
- Gained new retail penetration for our brands, opening
Winn-Dixie Stores, Stop & Shop Supermarket, Total Wine &
More, while gaining increased ACV presence in Publix, Kroger,
Harris Teeter, The Fresh Market
"Our multi-front strategies for increasing revenues are paying
off," stated Chris Reed, Founder, Chairman and CEO of Reed's Inc.
"We are taking bold steps to capitalize on our many capabilities
and to introduce new products and extend the reach of our great
brands."
"Our business is accelerating, and all systems are firing,"
stated James Linesch, Reed's Chief Financial Officer. "Our sales
and distribution network is expanding, our production capabilities
are increasing and improving, and we have a great pipeline of new
products. 2012 will be a pivotal year for our company."
Conference Call
The Company will conduct a conference call @ 4:15PM EDT on
Monday, March 26th to discuss its 2011 results and outlook for the
rest of 2012. To participate in the call, please dial the following
number 5 to 10 minutes prior to the scheduled call time (866)
240-5139. International callers should dial (713) 481-0091.
A replay will be available within a few days after the meeting
in the investor relations section of the Company's website at:
http://www.reedsinc.com/investor-relations/
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
REED'S, INC.
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2011 and 2010
2011 2010
------------- -------------
Sales $ 25,013,000 $ 20,376,000
Cost of tangible goods sold 15,847,000 13,118,000
Cost of goods sold - idle capacity 1,761,000 1,195,000
------------- -------------
Gross profit 7,405,000 6,063,000
------------- -------------
Operating expenses:
Delivery and handling expenses 2,307,000 1,728,000
Selling and marketing expense 2,470,000 2,319,000
General and administrative expense 2,878,000 2,740,000
------------- -------------
Total operating expenses 7,655,000 6,787,000
------------- -------------
Loss from operations (250,000) (724,000)
Interest expense (691,000) (586,000)
------------- -------------
Net loss (941,000) (1,310,000)
Preferred stock dividend (65,000) (73,000)
------------- -------------
Net loss attributable to common stockholders $ (1,006,000) $ (1,383,000)
============= =============
Loss per share available to common
stockholders - basic and diluted $ (0.09) $ (0.14)
============= =============
Weighted average number of shares outstanding
- basic and diluted 10,785,719 10,186,600
============= =============
MODIFIED EBITDA SCHEDULE
Year ended December 31,
--------------------------
2011 2010
(unaudited) (unaudited)
------------ ------------
Net loss $ (941,000) $ (1,310,000)
------------ ------------
Modified EBITDA adjustments:
Depreciation and amortization 653,000 616,000
Interest expense 691,000 586,000
Stock option and warrant compensation 300,000 198,000
Other stock compensation for services and
finance fees 131,000 366,000
------------ ------------
Total EBITDA adjustments 1,775,000 1,766,000
------------ ------------
Modified EBITDA income from operations $ 834,000 $ 456,000
============ ============
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.
REED'S, INC.
BALANCE SHEETS
December 31, December 31,
2011 2010
------------- -------------
ASSETS
Current assets:
Cash $ 713,000 $ 1,084,000
Inventory 6,099,000 4,555,000
Trade accounts receivable, net of allowance
for doubtful accounts and returns and
discounts of $135,000 and $105,000,
respectively 1,626,000 1,295,000
Prepaid inventory 168,000 138,000
Prepaid and other current assets 123,000 78,000
------------- -------------
Total Current Assets 8,729,000 7,150,000
Property and equipment, net of accumulated
depreciation of $1,739,000 and $1,178,000,
respectively 3,512,000 3,650,000
Brand names 1,029,000 1,029,000
Deferred financing fees, net of amortization
of $50,000 and $8,000, respectively 85,000 47,000
------------- -------------
Total assets $ 13,355,000 $ 11,876,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 2,310,000 $ 2,586,000
Accrued expenses 196,000 162,000
Dividends payable 83,000 44,000
Recycling fees payable 111,000 325,000
Line of credit 3,095,000 2,038,000
Current portion of long term financing
obligation 71,000 55,000
Current portion of capital leases payable 56,000 39,000
Current portion of note payable - 71,000
Current portion of term loan 152,000 -
------------- -------------
Total current liabilities 6,074,000 5,320,000
Long term financing obligation, less current
portion, net of discount of $626,000 and
$677,000, respectively 2,247,000 2,268,000
Capital leases payable, less current portion 153,000 146,000
Term loan, less current portion 576,000 -
------------- -------------
Total Liabilities 9,050,000 7,734,000
------------- -------------
Commitments and contingencies
Stockholders' equity:
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, 10,885,833 and
10,446,090 shares issued and outstanding,
respectively 1,000 1,000
Additional paid in capital 22,924,000 21,701,000
Accumulated deficit (19,890,000) (18,884,000)
------------- -------------
Total stockholders' equity 4,305,000 4,142,000
------------- -------------
Total liabilities and stockholders' equity $ 13,355,000 $ 11,876,000
============= =============
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Investor Relations Contact: Reed's Inc. (310)217-9400
Email: Email Contact www.reedsinc.com
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