Mainstream Distribution Growth Boosts Reed's Revenues

LOS ANGELES—Reed's, Inc. (NASDAQ: REED) reported second quarter (2Q) net sales increased 32 percent to $4.6 million , compared to the same period a year ago, on the strength of expanded presence in mainstream grocery chains such as Kroger, Ralph's, Sprouts, Haggen's and Earth Fare. Chris Reed, founder and CEO of Reed's, pointed out the increased revenues were achieved without costing profitability, as evidenced by a 87-percent jump in gross profits and a slight reduction in operating expenses, year-over-year. In fact, the company managed to trim its prior year loss of $0.72 million down to $0.52 million for 2Q 2008.
"During the second quarter, we achieved year-over-year sales growth of approximately 32 percent, continued to expand our presence and shelf space within mainstream grocery store accounts and continued to build international awareness of Reed's brands," Reed said, noting his company entered into enhanced partnerships with several nationwide grocery store accounts during the quarter. " This is evidenced by the expansion of our sales, the improvement in our gross margin to 27.8 percent and the sequential reduction in operating expenses by approximately $700,000 from the first quarter of 2008, the combination of which resulted in a large decrease in our net loss to approximately $0.5 million. We expect this trend to continue as we reduce operating expense by an additional $300,000 to $400,000 in the third quarter of 2008."