LOS ANGELES, Oct. 13, 2016 (GLOBE NEWSWIRE) -- Reed’s, Inc., maker of the top-selling sodas in natural food stores nationwide, announced the financial results for its fiscal third quarter ended September 30, 2016.
Financial Overview:
For the third quarter 2016 compared to the third quarter 2015:
- Third quarter volume increased 18.1%
- Third quarter net sales increased 15.1% to a record $12.3 million from $10.7 million
- Third quarter gross margin improved to 23.4% from 14.6%
- Delivery and handling costs decreased 33.5% or $453,000 to $901,000
- Selling and marketing costs decreased 26.1% or $324,000 to $918,000
- General and Administrative expenses decreased 21.4% or $237,000 to $871,000
- Operating profit increased by $2.3 million to $196,000 as compared to an operating loss of ($2.1 million) in the prior year period when the Company experienced significant out of stock production issues
- EBITDA increased by $2.3 million to $557,000 as compared to a loss of ($1.8 million) in the prior year period
- Net loss improved significantly to a loss of ($0.02) per share from a loss of ($0.19) per share in the prior year period
Sales and Marketing Overview:
- Reed’s branded product gross sales grew 14% driven by the growth of Reed’s Stronger Ginger Brew that grew 293%
- Virgil’s branded product gross sales grew 13% driven by Virgil’s Root Beer that grew 22%
- Butterscotch Beer gross revenues grew more than 170% to $595,000
- Private label sales grew 52% and exceeded $2.5 million of gross sales revenue
- Reed’s Ginger Brews are now available at more the 1,300 Target stores
- Reed’s and Virgil’s are now authorized and available in 1,135 CVS pharmacies throughout the country
- Reed’s partners with Barone Distribution headquartered in Reno, Nevada
- Reed’s expands distribution footprint in Southern California with John Lenore & Company
Chris Reed, Founder and CEO of Reed’s, Inc. stated, “We are clearly back on track and continue to generate sales momentum for our Reed’s and Virgil’s natural craft sodas. We had a record third quarter for revenues and returned to achieving positive operating profits for the first time in almost two years. Our EBITDA turned positive and increased by more than $2.3 million during the quarter. Further analysis of our SPINS data shows that although the out of stock situation resulted in us losing some points of distribution, demand for our product remains strong as is evident by higher sales volume per point of distribution. While we had a nice gross margin recovery year over year we have plans in place to significantly improve margins going forward. Between packaging, purchasing and additional operating efficiencies we believe we can get our gross margins north of 30% beginning next year with further improvement from those levels by year end. Additionally, we are finalizing a solid slate of industry experts to serve as independent board members of the Company. I am excited to partner with these highly qualified individuals as we accelerate our growth and take Reed’s to the next level,” Reed concluded.
Dan Miles, Chief Financial Officer of Reed’s Inc., stated, “Last year we experienced a significant out of stock situation that severely impacted our business. We believe that those events are now behind us as we focus on growth and profitability going forward. We were aggressive in how we controlled expenses during the quarter with a focus on operating more efficiently. We achieved significant savings on all line items and continue to operate in a very disciplined manor. We look forward to completing the final stages of our plant upgrade during the fourth quarter that we believe will further improve our operations, liquidity and balance sheet”. Full report.
