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Friday, 08/05/2016 8:59:19 AM

Friday, August 05, 2016 8:59:19 AM

Post# of 322
>>> Reed's Inc. Announces Second Quarter Results


August 04, 2016


http://finance.yahoo.com/news/reeds-inc-announces-second-quarter-200500138.html



LOS ANGELES, Aug. 04, 2016 (GLOBE NEWSWIRE) -- Reed's, Inc. (NYSE MKT:REED), maker of the top-selling sodas in natural food stores nationwide, today announced the financial results for its fiscal second quarter ending June 30, 2016.


Financial Highlights for Second Quarter 2016 versus Second Quarter 2015
•Second quarter net sales decreased from $12.2 million to $11.0 million
•Gross margin improved 500 basis points to 24% versus 19%
•Operating expenses decreased 28% driven by delivery expenses down 26%, sales expenses down 29% and general and administrative expenses down 30%
•Operating loss narrowed by 30% to $349,000 versus $493,000
•Shareholder equity has increased to $1,082,000 as compared to $785,000 at year end 2015
•Working capital increased $1,862,000 to $1,216,000 at quarter end as compared to ($646,000) at March 31, 2016
•All debt maturities were extended until Q4 2017
•Trailing twelve-month Idle Plant costs decreased $1.2 million to 3.8% of sales versus 5.8%
•EBITDA continues to be positive for the year at $5,000

Operational Highlights
•In stock order fill rate increased to 98.9% this year as compared to a low point of 58.8% during last year’s supply chain issues
•L.A. Plant achieved level 2 SQF re-certification for the second year scoring 95 points versus 86 points in the prior year. This is an important differentiation certification for private label production
•L.A. Plant equipment installation will occur during the months of November and December

Marketing Highlights:
•Retail sales of Reed’s all-natural Bag in Box fountain soda will begin selling in a select store trial through one of the largest fast casual restaurant chains in the US in Q3
•Reed’s Partnered with Dari Farms Distribution of New England
•Stronger Ginger Brew authorized in 1,600+ Kroger stores and Kroger banners across the U.S.
•Reed’s partnered with Pure Beverage and Zink Distributing in Indiana to complete coverage for entire state
•Reed’s and Virgil’s now available at 350+ Shopko locations throughout the Midwest, West and Pacific North West regions
•Chris Reed was a panel member at Maxim Groups Health and Wellness summit in New York
•Reed’s demonstrated its new Bag in Box fountain at the National Restaurant Association tradeshow in Chicago
•Reed’s attends the Summer Fancy Food Show in New York City

Chris Reed, Founder and CEO of Reed’s, Inc. commented, "We continue to see recovery in the marketplace from our supply chain issues of last year. Our delivery fill rate was as low as 58.8% last year, and now we are filling our orders at almost 100%. Demand for our brands continues to build as we open new markets and retailers across the country and re-introduce our products to those retailers affected by last year’s supply issues. Our recovery is fastest with our top product lines, Reed’s Ginger Brews and our Virgil’s Natural Sodas.

Progress with the development and rollout of our new all natural fountain sodas continues successfully, and our new flavors are scheduled to be test marketed with one of the largest fast casual chains in the country during the third quarter.

In the face of lower volumes, we showed significant discipline in our ability to control expenses during the second quarter. As our volume improves in the second half of the year, these disciplines will contribute to our bottom line improvement. Margin had been under pressure due to the supply chain issues faced last year that caused our tight cash situation. Margins should continue to improve as a result of our improved cash position, which is improving our purchasing and sourcing abilities. We also expect improvements in production efficiencies from our Los Angeles plant expansion that is anticipated to be up and running by year end.”

Dan Miles, Chief Financial Officer of Reeds’ Inc. stated, “We see margin growth opportunities as we maintain our cost containment initiatives in sales, general and administrative, and operational areas. We believe that we will achieve positive cash flow for the balance of the year as we continue to work on improving operating efficiencies while generating sales growth during the remainder of the peak summer selling season.”

The Company will conduct a conference call at 4:30 PM EDT on August 4th to discuss its 2016 fiscal second quarter results. To participate in the call, please dial the following number 5 to 10 minutes prior to the scheduled call time:

Domestic callers should dial 877-246-4118
International callers should dial +1 212-231-2904
A replay of the call will be available by the following day in the investor relations section of the Company's website at: http://www.reedsinc.com/investors/.

About Reed's, Inc.
Reed's, Inc. makes the top-selling sodas in the natural and specialty foods industry and are sold in over 15,000 natural and mainstream supermarkets nationwide. Reed's products are sold through an additional estimated 40,000 accounts that include specialty gourmet, natural food stores, retail stores, convenience stores and restaurants nationwide and in select international markets. Reed’s has sold over 500 million bottles since inception in June 1989 and is considered the leader of the fast growing craft soda category. Its seven 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 a top-selling cola line in natural foods, the China Cola product line. In 2012, the Company launched its Reed's Culture Club Kombucha line of organic live beverages. Other product lines include Reed's Ginger Candies and Reed's Ginger Ice Creams.

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