Reed's, Inc., a maker of the sodas in natural food stores nationwide, announced the financial results for its second fiscal quarter ending June 30, 2012.
Revenues increased 27 percent to $7.8 million in 2012, compared to 2011.
Gross profit increased to $2.7 million in 2012, an increase of 39 percent from 2011. The gross profit percentage increased to 34 percent of sales, an increase from 31 percent in 2011. Earnings before non-cash items and finance costs (modified EBITDA) increased to $831,000 during 2012, as compared to $395,000 in the prior year period.
Net income for the 2012 second quarter was $444,000, or $0.04 per share, compared to a loss of $55,000 a year earlier.
The company reduced inventory levels by over $1 million.
Working capital at June 30, 2012 was $3.1 million, as compared to $2.7 million at Dec. 31, 2011.
The company developed and launched new Reed's Culture Club Kombucha in four flavors.
It also launched Reed's Chocolate Crystallized Ginger candy.
The company named new distribution partners in, South Carolina, Michigan, Utah and Tennessee.
It also started shipping a new private label project for large national supermarket chain.
"This is our 11th quarter of double-digit revenue growth and has resulted in the company moving into a profitable position," said Chris Reed, founder and CEO of Reed's in a prepared statement. "The second quarter results are confirmation that our 2012 business plan remains on track. Our branded and private label categories continue expand. We believe our momentum will continue in the second half of the year. Our new Kombucha line continues to roll out nationally. Early results are positive."
James Linesch, chief financial officer, stated, "We have reached a profitable sales velocity and margin contribution by holding down costs and by investing in effective promotions. Our gross margins have increased mostly through higher effective prices and lower production and raw material costs overall, while also making a higher investment in promotions and discounts this year. We gained more liquidity by reducing our inventory levels and improving turnover through careful production scheduling and timing of raw materials purchases. We have aggressive plans for expansion on several fronts this year, and we believe that our company is well-capitalized to carry out our plans."