Reed’s, Inc. Announces Preliminary Fiscal Year 2008 Results
Tell-a-FriendLOS ANGELES, CA - 03/04/09— Reed’s, Inc.
(NASDAQ: REED), maker of the top-selling sodas in natural food stores
nationwide, today announced preliminary results for the fiscal year
ended December 31, 2008.
— Full year 2008 net sales increased 17% over full year 2007 to $15.3
million
— Full year 2008 gross profit increased 69% over full year 2007 to $3.4
million
— Full year 2008 gross margin expands 680 basis points over full year
2007 to approximately 22%
— Anticipates additional improvement in 2009 gross profit; by another
20% - 40%
— Anticipates an additional 2009 OPEX savings of $2.5 million over 2008
— Anticipates 2009 to be close to breakeven as a result of gross profit
expansion and OPEX savings
Based on preliminary results for the full year of 2008, Reed’s
expects to report net sales of approximately $15.3 million,
representing a 17% increase over 2007 net sales of $13.1 million.
The growth in net sales was driven by a number of factors including
increased sales of the Company’s Virgil’s and Reed’s Ginger Brews
product lines in existing natural food supermarkets, the launch of new
products in specialty packaging, introduction of Virgil’s Diet Cola,
and rapid expansion into new mainstream supermarkets and
distributors.
Gross profit for the full year 2008 is expected to be $3.4 million,
or approximately 22.2% of net sales, an increase of approximately 69%
from $2.0 million, or 15.5% of net sales, for the full year 2007. The
year-over-year improvement in gross margin reflects the benefit of
several strategic initiatives implemented in 2008 including pricing
increases of the Company’s Reed’s Ginger Brew line by approximately
20%, better management of promotional discounting by the sales force
and renegotiated production costs from the Company’s largest
co-packer.
Christopher Reed, Founder and CEO of Reed’s, Inc., stated, “Our
strong preliminary revenue and gross margin results reflect the
inherent value in Reed’s re-aligned business model centered on
mainstream grocery store accounts. In 2008, we recognized the
opportunity to leverage our position as the top #1, #2, #3 and #4
selling-sodas in natural foods into the mainstream marketplace. We
subsequently repositioned our sales force to better capitalize on
this opportunity and have made tremendous strides in expanding our
presence in several nationwide grocery store accounts. In addition,
we reaffirmed our commitment to innovation with the introduction of
several new beverage products and specialty packaging which we
believe will improve brand awareness and highlight Reed’s as a
trendsetter in the beverage category.”
Mr. Reed continued, “In addition to driving top-line growth, we
implemented several methods to improve gross margins and generate
operating efficiencies. The initial success of these initiatives is
demonstrated in our estimated 680 basis point improvement in our
gross margins for the full year 2008 versus 2007. We also expect to
generate approximately $2.5 million in additional operating expense
savings in 2009 resulting from ongoing operating efficiencies
implemented in the 4th quarter of 2008.
“Looking ahead, we expect to continue to improve our top and bottom
line results as we build upon our positive momentum. We believe our
focus on mainstream grocery store accounts, compelling new product
introductions, like our Reed’s Natural Energy Elixir Energy drink
launch and expansion of existing product lines positions Reed’s to
continue to grow its market share in 2009.”
About Reed’s, Inc.
Reed’s, Inc. makes the top selling sodas in natural food markets
nationwide and is currently selling in 10,500 supermarkets in natural
foods and mainstream. 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. In addition, 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.
Reed’s products are sold through specialty gourmet and natural food
stores, mainstream supermarket chains, retail stores and restaurants
nationwide, and in Canada. For more information about Reed’s, please
visit the company’s website at: http://www.reedsgingerbrew.com or
call 800-99-REEDS.
Follow Reed’s on Twitter at: http://www.twitter.com/reedsgingerbrew
Join the Reed’s Facebook group at:
http://www.facebook.com/group.php?gid=79281735864
More information can be found at:
http://www.irthcommunications.com/clients_REED.php
SAFE HARBOR STATEMENT
Some portions of this press release, particularly those describing
Reed’s goals and strategies, contain “forward-looking statements.”
These forward-looking statements can generally be identified as such
because the context of the statement will include words, such as
“expects,” “should,” “believes,” “anticipates” or words of similar
import. Similarly, statements that describe future plans, objectives
or goals are also forward-looking statements. While Reed’s is working
to achieve those goals and strategies, actual results could differ
materially from those projected in the forward-looking statements as
a result of a number of risks and uncertainties. These risks and
uncertainties include difficulty in marketing its products and
services, maintaining and protecting brand recognition, the need for
significant capital, dependence on third party distributors,
dependence on third party brewers, increasing costs of fuel and
freight, protection of intellectual property, competition and other
factors, any of which could have an adverse effect on the business
plans of Reed’s, its reputation in the industry or its expected
financial return from operations and results of operations. In light
of significant risks and uncertainties inherent in forward-looking
statements included herein, the inclusion of such statements should
not be regarded as a representation by Reed’s that they will achieve
such forward-looking statements. For further details and a discussion
of these and other risks and uncertainties, please see our most
recent reports on Form 10-KSB and Form 10-Q, as filed with the
Securities and Exchange Commission, as they may be amended from time
to time. Reed’s undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events, or otherwise.
Contact:
IRTH Communications, LLC
Mark B. Moline
Managing Partner
760-458-4899
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http://www.irthcommunications.com
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