LOS ANGELES, March 23, 2016 (GLOBE NEWSWIRE) -- Reed's, Inc., the leading maker of craft sodas nationwide, today announced the financial results for its fourth quarter and fiscal year ending December 31, 2015.
Financial Highlights for Fourth Quarter 2015 versus 2014
- Fourth quarter net sales increased 13.0% to a record $12.4 million from $11.0 million
- Gross profit increased 25.5% to $3.1 million from $2.5 million
- Gross margin increased 250 basis points to 25.4% from 22.9%
- Operating expenses decreased 6.3% driven by:
- Delivery and handling expenses decreased 14.9% to $1.1 million from $1.3 million
- Sales and marketing expenses decreased 11% to $1.1 million from $1.2 million
- G&A expenses increased 12.9% to $1.0 million from $0.9 million
- Net loss improved to ($0.5 million) from ($1.2 million)
Financial Highlights for Full Year 2015 versus 2014:
- Net sales increased 6% to a record $45.9 million driven by Reed’s Ginger Brew that grew 19% during the full year
- Topline promotional activity decreased to 7.6% of sales versus 9.7% in the prior full year
- Gross profit dollars decreased 11% to $11.6 million due to inventory write downs in 2015
- Gross margin decreased from 30.0% to 25.3% in 2015 related to write downs in 2015
- Operating expenses increased as a percent of sales from 29.9% to 31.2% in 2015
- The Company improved its year-end cash position to $1.8 million from $1.0 million
Operational Highlights:
- Reed’s #1 sku Reed’s Extra, which represents 27% of product mix grew +23% for the year
- Syndicated data shows Reed’s growing +37% in latest 52 weeks and +29% in the latest 12 weeks
- Stronger Ginger Brew introduced and launched at Expo West
- DSD Distribution expansion with DP Distribution in Caribbean, Wonderland Distributing Co. in Northern California, SpringBok Companies in South Africa, RBI Beverages in south central U.S.
- Sonoma Sparklers launches in all 4600 Rite locations nationwide
- Reed’s enters into a marketing partnership with Pernod-Ricard (Absolut Vodka) to develop co-branding packages, advertising, distribution and promotions to launch into retail channels across the US
- Chris Reed invited as a featured speaker, along with other ‘top-level’ beverage executives to Beverage Digest’s Future Smarts conference, one of the most influential conferences in the industry.
- Supply chain enhanced and brewing capacity increased with addition of two co-packers
- Continued plant upgrades to increase plant capacity
- Reed’s Culture Club Kombucha gains authorization in Shaws Supermarkets. Successful store test leads to Reed’s Kombucha rolling out to 150 locations.
- Reed’s and Virgil’s gain distribution into the Reasors Supermarket chain headquartered in Oklahoma.
- 2015 tradeshows included: Natural Products Expo West, Nightclub & Bar Show, National Restaurant Show, Fancy Food Show NYC, Natural Products Expo East, National Association of Convenience Stores, Annual BJ’s Wholesale Supplier Summit, FARE Conference sponsored by Sysco
- Beverage World - Feature Story in June issue “Putting the pop back in Soda”
- Bar Business Magazine –July issue cover story touting the resurgence of the Moscow Mule focused on Reed’s Stronger Ginger Brew
- Progressive Grocer Magazine – 2015 Editors Pick “Reed’s Stronger Ginger Brew” – Represented only beverage selected
- Beverage World Magazine – 2015 Liquid Refreshment Power Players of the Year – Reed’s selected as one of the top five movers and shakers in the market
- Bar Biz Spirits 2015 Competition – Reed’s wins best carbonated mixer
“Going into the second quarter of 2015, Reed’s had gathered quite a head of steam. We had planned on a new facility being up and running to handle the near capacity situation. Not only did the new plant not come online until late in the third quarter, our primary plant had its first big hiccup in over 20 years of producing for us. We left at least $7 million in sales on the table during this time and created a considerable supply chain nightmare. By the fourth quarter we had two new facilities online and were getting our customers back on track. We feel the supply chain issues are behind us, with not one, but two new facilities supplying us. Our west coast plant is in the midst of a major upgrade, which will add even more production capability and reduce production costs. The shelf placements that we lost during our supply chain interruption are still being recovered and sales are starting to build again.
Our largest opportunity to date, the first natural soda fountain, continues to move forward. Late 2014 we were approached by a large fast casual restaurant chain to develop the next generation of fountain sodas. After 18 months of R&D, we presented at the Natural Products Expo in March the future of the soda on fountain. Our flavors are natural, with fresh exciting new flavors, reduced calories and preservative free. We have partnered with some of the largest soda fountain equipment manufacturers to create a new look and feel for soda fountain equipment. This newly developed equipment will match the quality and progressive nature of these new fountain sodas.
We are looking forward to a much more exciting and profitable 2016. Not only will our core brands and products continue their march, but also we anticipate increasingly better margins as we bring online our new facilities for production. We are looking forward to the advent of the first natural soda fountain as we unleash it into the marketplace”, stated Chris Reed, Founder and CEO. Full report.
