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Reeds -- >>> Reed's Inc. Continues Profitable Growth



23% Sales Improvement for Third Fiscal Quarter
Press Release: Reed's, Inc.



http://finance.yahoo.com/news/reeds-inc-continues-profitable-growth-195144326.html




LOS ANGELES, CA--(Marketwire - Nov 14, 2012) - Reed's, Inc. ( NASDAQ : REED ), maker of the top-selling sodas in natural food stores nationwide, today announced the financial results for its third fiscal quarter ending September 30, 2012.

Financial Highlights for the Quarter:

•Revenues increased 23% to $7.9 million in 2012, compared to 2011.

•Gross profit increased to $2.5 million in 2012, an increase of 21% from 2011.

•Earnings before non-cash items and finance costs (modified EBITDA) increased to $395,000 during 2012, as compared to $269,000 in the prior year period (See EBITDA table at end of this release for further non-GAAP information).

•Net income for the 2012 second quarter was $22,000 compared to a loss of $175,000 a year earlier.

•Working capital at June 30, 2012 was $3.2 million, as compared to $2.7 million at December 31, 2011.


Operational Highlights:

•Volume of branded Reed's and Virgil's products shipped grew at a rate of 16% versus same quarter prior year and is up over 20% YTD over last year.

•New distribution partnership with Central Beverage of Chicago.

•New distribution arrangement with Geyser Beverage of the Greater San Francisco Bay area market.

•Expanded Reed's and Virgil's into Tops Friendly Markets located upstate NY and PA.

•New distribution agreement with Zip Beverage of Montana.

•Secured three new private label brand contracts with some of the largest retailers in the US.

•Introduced Reed's and Virgil's products to the Asian market attending the Natural Products Expo Asia show for first time.

•Reed's introduces Culture Club Kombucha in Baltimore, MD, becoming a title sponsor of Natural Products Show Expo East and sampling more than 10,000 retailers, distributors and attendees.

•Gained Culture Club Kombucha distribution into a minimum of 800+ new retailers throughout the US and into select Whole Foods regions with more to come.

•Snoop Lion Partners With Reed's Ginger Brew and Causes.com to Raise Awareness for the Mind Gardens Project in Jamaica.

•Continued Los Angeles plant upgrades designed to increase capacity and efficiency, including doubling tank capacity to accommodate fast expansion of the new Kombucha line.


"We have now expanded our business at over 20% for the last twelve quarters. Brand growth continues to be the main driver for this expansion. Our recent launch of Reed's Culture Club Kombucha has taken off and could possibly be our biggest growth driver for 2013 and beyond. We have set our goal at being the number one or two in this $250-300 million fast growing Kombucha category," stated Chris Reed, Founder and CEO at Reed's Inc.

Chris Reed further commented, "Additionally, our private label business is accelerating as we become more accepted as a reliable supplier. Revenues from private label brands grew twofold over same quarter prior year due to the development of two new partnerships with national retail chains."

James Linesch, Chief Financial Officer, stated, "Our business has continued its healthy organic expansion in the third quarter. Gross margins on our branded products improved slightly over last year and gross margins on our private label products are running about 5% higher than last year. Our kombucha launch has involved an increase in production costs as well as promotional costs, both of which affected our overall margins and profitability in the quarter. As our kombucha rollout progresses, however, these start-up costs will come down. We anticipate that all of our product lines will contribute strong net margins in 2013."

The Company will conduct a conference call @ 4:15PM EST today, November 14th, to discuss its 2012 third quarter results and outlook for the future. To participate in the call, please dial the following number 5 to 10 minutes prior to the scheduled call time [phone]. International callers should dial [phone].

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 13,000 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 https://www.facebook.com/ReedsGingerBrew


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