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.
-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.
• 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.