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REEDS, Inc. Message Board

  • stockerzzz1 stockerzzz1 Mar 25, 2013 5:44 PM Flag

    Conference Call Notes

    Reed's Inc. Announces Year-End 2012 Results

    LOS ANGELES, CA--(Marketwire - Mar 25, 2013) - 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 year ending December 31, 2012.

    Financial Highlights for the Quarter:

    -Revenues increased 20% to $30 million in 2012, compared to 2011.

    -Gross profit increased 23% to $9.1 million in 2012.

    -Earnings before non-cash items and finance costs (modified EBITDA) increased to $1 million during 2012. (See EBITDA table at end of this release for further non-GAAP information).

    -Net loss for the 2012 fiscal year was $524,000 compared to a loss of $941,000 a year earlier.

    -Working capital at December 31, 2012 was $2.3 million, as compared to $2.7 million at December 31, 2011.

    Operational Highlights:

    -Introduced our Culture Club Kombucha in July 2012 and increased distribution into a minimum of 800+ new retailers throughout the US and into select Whole Foods.

    -Volume of branded Reed's and Virgil's products shipped grew at a rate of 20% over last year

    -Expanded network of DSD distribution in numerous key regions increasing sales through this distribution channel by approximately 50%.

    -Expanded distributor sales by over 30% by partnering in marketing efforts and focusing on sales support for distributors.

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

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    • 2013 Revenue Predictions:

      • Expect private label to increase by a couple million in 2013.
      • Guess that Branded will get $3-5 million more
      • Kombucha $3-5 million more
      • Shooting for $8-10 million more in revenue in 2013. ($38 - $40 million).

      Expect to show profitability in 2013, even though some profits will be spent on advertising and marketing.

      - Kombucha sales were $600,000 in Q4. Estimate that they will do between $3-5 million in 2013 in total kombucha sales.
      - Gross margin was down because increases in promotional costs for kombucha.
      - In 60 Whole Foods out of approximately 300 stores.
      - Will get 5-10% better gross margins than branded soda.
      - Kombucha is running about a case to a case-and-a-half per flavor each week at stores.
      - Ended 2012 with a run-rate of about 2.5 million, think that will triple.
      - Hard launch was Nov. 1
      - Have a lot of stores that agreed to sell kombucha, just waiting for the placements to finalize.
      - Redoing some labels to increase visibility.
      - Holding back on some new flavors they've developing to avoid oversaturating the market.

      DSD network revenues increased 50% from 2011, now account for 10% of overall sales.

      Chris confirmed that they are selling in Costco.

      Direct accounts represent 1/3 of all revenues.

      Current plant utilization is about 50% but will be running 75% in Q3 and Q4.

      Progressively increasing the size of the sales staff, gaining economies of scale.

      January was a record-breaking month for sales of Extra Ginger Brew and January is typically not strong for soda sales.

      See an acquisition within 5-7 years, want to ramp up revenues and gross margins before that time to maximize valuation.

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