Reed’s, Inc. (NASDAQ: REED) (“Reed’s” or the “Company”), owner of
the nation’s leading portfolio of handcrafted, natural ginger
beverages, is providing preliminary unaudited fourth quarter and
full year 2022 financial results, as well as introducing its
financial outlook for 2023.
“We generated record net sales during the fourth quarter and
continue to see meaningful improvements to the bottom line as the
implementation of our various growth and cost saving initiatives
take effect,” said Norman E. Snyder, CEO of Reed’s. “After enduring
unprecedented inflation and supply chain impediments, we have
regained momentum.
“We have completed a comprehensive cost review and have
rightsized our cost structure for sustainability—cost of goods has
been lowered, delivery and handling costs, transportation costs,
marketing spend, and general and administrative costs all have been
reduced. In the aggregate, we anticipate more than $6 million of
operating cost savings from 2022 levels. Our commitment to the
bottom line has never been more pronounced.
“As we progress through 2023, we plan to continue executing our
plan to deliver double-digit net sales growth along with gross
margin expansion and the aforementioned cost savings. As our
preliminary numbers indicate, Reed’s is trending in the right
direction, and we will maintain our focus on turning modified
EBITDA profitable by the end of the second quarter and cash flow
positive thereafter.”
Preliminary Q4 2022 Financial Highlights (vs. Q4
2021)
- Net revenue is projected to increase 18% to approximately $15.1
million.
- Gross profit is expected to increase 49% to approximately $3.9
million, with gross margin anticipated to improve 530 bps to
approximately 26%.
- Delivery and handling costs have declined 7%.
- Selling and marketing expenses have declined 23% to
approximately $1.7 million.
- General and administrative costs have been reduced by 8% to
$1.6 million.
- Modified EBITDA loss is expected to improve to approximately
$(1.9) million compared to $(3.9) million.
Preliminary FY 2022 Financial Highlights (vs.
2021)
- Net revenue is projected to increase 7% to approximately $53.1
million compared to $49.6 million.
- Gross profit is expected to be approximately $12.6 million
compared to $13.6 million, with gross margin expected to be
approximately 24% compared to 27%.
- Delivery and handling costs have declined 2%.
- Selling and marketing expenses have declined 25% to
approximately $7.3 million.
- General and administrative expenses have been reduced by 13% to
$6.9 million.
- Modified EBITDA loss is expected to improve to approximately
$(12.2) million compared to $(13.5) million.
FY 2023 Financial Outlook
The Company projects double-digit net revenue growth in 2023,
gross margin to surpass 30%, and modified EBITDA to turn profitable
by the end of the second quarter. The Company also expects to turn
cash flow positive in 2023.
About Reed's, Inc.
Reed’s is an innovative company and category leader that
provides the world with high quality, premium and naturally bold™
better-for-you beverages. Established in 1989, Reed's is a leader
in craft beverages under the Reed’s®, Virgil’s® and Flying
Cauldron® brand names. The Company’s beverages are now sold in over
45,000 stores nationwide.
Reed’s is known as America's #1 name in natural, ginger-based
beverages. Crafted using real ginger and premium ingredients, the
Reed’s portfolio includes ginger beers, ginger ales, ready-to-drink
ginger mules, hard ginger ale, ginger shots, and ginger candies.
The brand has recently successfully expanded into the zero-sugar
segment with its proprietary, natural sweetener system.
Virgil's® is an award-winning line of craft sodas, made with the
finest natural ingredients and without GMOs or artificial
preservatives. The brand offers an array of great tasting, bold
flavored sodas including Root Beer, Vanilla Cream, Black Cherry,
Orange Cream, and more. These flavors are also available in nine
zero sugar varieties which are naturally sweetened and certified
ketogenic.
Flying Cauldron® is a non-alcoholic butterscotch beer
prized for its creamy vanilla and butterscotch flavors. Sought
after by beverage aficionados, Flying Cauldron is made with natural
ingredients and no artificial flavors, sweeteners, preservatives,
gluten, caffeine, or GMOs.
For more information,
visit drinkreeds.com, virgils.com and flyingcauldron.com.
Cautionary Note Regarding Preliminary Financial
Information, Financial Guidance and Growth
This release should be read in conjunction with the financial
statements and management’s discussion and analysis (“MD&A”)
included in the Company’s filings with the Securities and Exchange
Commission (“SEC”), as well as the matters discussed under "Risk
Factors" in the Company's Form 10-K for the fiscal year ended
December 31, 2021 as updated by the Company’s filings with the SEC.
The audited annual consolidated financial statements of the Company
for the year ended December 31, 2022, and related MD&A are
expected to be released on or before March 31, 2023.
Preliminary financial information, financial guidance and growth
disclosure have been prepared by management based on information
available to it as of the date hereof and should not be viewed as a
substitute for full financial statements prepared in accordance
with GAAP. Estimated preliminary results are subject to completion
of our customary quarterly and annual financial closing and audit
and review procedures and are not comprehensive statements of our
financial results for the three months and fiscal year ended
December 31, 2022 and are subject to adjustments as a result of
such procedures. In addition, preliminary financial information and
growth disclosure is not necessarily indicative of the results to
be achieved in any future period. As a result, actual results may
differ materially from the preliminary results shown above and will
not be publicly available until the Company reports its fourth
quarter and full year fiscal 2022 results in March 2023. In
addition, this preliminary financial information and guidance is
not necessarily indicative of the results to be achieved in any
future period. Our financial statements and related notes as of and
for the fiscal year ended December 31, 2022 is expected to be filed
with the SEC during March of 2023.
Reed‘s 2023 guidance reflects year-to-date and expected future
business trends and includes continuing impacts of COVID-19 on the
supply chain and logistics as of the date hereof. New supply chain
challenges that may develop and further potential inflation cannot
be reasonably estimated and are not factored into current fiscal
2023 guidance. These risks could materially impact our ability to
access raw materials, production, transportation and/or other
logistics needs.
We include Modified EBITDA for the reasons as described under
the heading “Modified EBITDA” below. We encourage you to review our
financial information in its entirety and not rely on a single
financial measure.
Modified EBITDA
In addition to our GAAP results, we present Modified EBITDA as a
supplemental measure of our performance. However, Modified EBITDA
is not a recognized measurement under GAAP and should not be
considered as an alternative to net income, income from operations
or any other performance measure derived in accordance with GAAP,
or as an alternative to cash flow from operating activities as a
measure of liquidity. We define Modified EBITDA as net income
(loss), plus interest expense, depreciation and amortization,
stock-based compensation, changes in fair value of warrant expense,
and one-time restructuring-related costs including employee
severance and asset impairment.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are typically identified by terms such as "estimate,"
"expect,” “project”, “anticipate”, "guidance," "intend," "financial
outlook," "plan, "will," “approximately”, and similar expressions.
These forward-looking statements are based on current expectations
and include our expectations with respect to preliminary financial
results for the three months and full year ended December 31, 2022,
financial guidance for fiscal year 2023 and growth disclosure. The
achievement or success of the matters covered by such
forward-looking statements involves risks, uncertainties, and
assumptions, many of which involve factors or circumstances that
are beyond our control. Reed‘s 2023 guidance reflects year-to-date
and expected future business trends and includes impacts of
COVID-19 on the supply chain and logistics as of the date hereof.
New supply chain challenges that may develop and further potential
inflation cannot be reasonably estimated and are not factored into
current fiscal 2023 guidance. These risks could materially impact
our ability to access raw materials, production, transportation
and/or other logistics needs.
Financial guidance should not be viewed as a substitute for full
financial statements prepared in accordance with GAAP.
If any such risks or uncertainties materialize or if any of the
assumptions prove incorrect, Reed’s actual results could differ
materially from the results expressed or implied by the
forward-looking statements we make, including our ability to
achieve our targets for the fiscal year ending December 31, 2023.
The risks and uncertainties referred to above include, but are not
limited to: risks associated with current economic uncertainties
tied to the COVID-19 pandemic, including but not limited to its
effect on customer demand for the our products and services and the
impact of potential delays in supply of product inputs and customer
payments; risks associated with new product releases; the impacts
of further inflation; risks that customer demand may fluctuate or
decrease; risks that we are unable to collect unbilled contractual
commitments, particularly in the current economic environment; our
ability to compete successfully and manage growth; our need for
significant capital; our ability to develop and expand strategic
and third party distribution channels; our dependence on third
party suppliers, brewers and distributors risks related to our
international operations; our ability to continue to innovate; our
strategy of making investments in sales to drive growth; increasing
costs of fuel and freight, protection of intellectual property;
competition; general political or destabilizing events, including
war, conflict or acts of terrorism; the effect of evolving domestic
and foreign government regulations, including those addressing data
privacy and cross-border data transfers; and other risks detailed
from time to time in Reed’s public filings, including Reed’s annual
report on Form 10-K filed on April 15, 2022 and subsequent reports
filed with the Securities and Exchange Commission, which are
available on the Securities and Exchange Commission’s web site
at www.sec.gov. These forward-looking statements are based on
current expectations and speak only as of the date hereof. Reed’s
assumes no obligation and does not intend to update these
forward-looking statements, except as required by law.
Investor Relations Contact
Sean Mansouri, CFAElevate IRir@reedsinc.com (720) 330-2829
Reeds (NASDAQ:REED)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Reeds (NASDAQ:REED)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024