Reed’s develops, manufactures, markets, and sells natural non-alcoholic and “New Age” beverages, candies and ice creams. The company currently offers six unique product lines including, Reed’s Ginger Brews, Virgil’s Root Beer and Cream Sodas, China Colas, Reed’s Ginger Brews, Reed’s Candies, and Reed’s Ginger Ice Creams.
This morning, Reed’s released its quarterly report to the public. Net sales increased 10% from $3,157,818 to $3,472,360 for the quarter ended June 30, 2007 compared to the same period last year. The company believes the increase in net sales over this period were caused by its successes in its Southern California direct distribution strategy, expansion in its national distribution points, and increases in its direct sales to large retailers.
The CEO and Founder, Chris Reed, commented, “We are very pleased with our first half 2007 results as we achieved year-over-year sales growth in excess of 25%, further expanded our U.S. distribution network and continued to build awareness of the Reed’s brand. Our robust sales growth is indicative of the strong demand and continued acceptance of Reed’s portfolio of products within the mainstream marketplace. At the same time, we expanded our gross margin approximately 210 basis points through tight management of freight expense. As expected, operating income for the first half of 2007 declined year-over-year, as we utilized the proceeds from our capital raise to ramp our sales force efforts and further invest in the infrastructure to meet the increased demand for Reed’s portfolio of products.”
He continued, “Looking ahead to the second half of 2007, we will continue to invest in our infrastructure in order to position Reed’s for long-term growth. Core to our growth strategy is expanding our distribution network and, as such, we will continue to add key sales personnel from major beverage companies in order to service new accounts and increase our sales and marketing efforts. While we expect this to result in increased sales force expense in the second half of 2007, we anticipate adding an additional 10 to 20 key markets by year end. Additionally, we will continue to evaluate new products, packaging and co-branding opportunities in order to reach a broader audience and drive top line growth for the remainder of 2007 and beyond. Lastly, we remain focused on strengthening our leadership efforts and anticipate that by the end of 2007 we will have hired a Chief Financial Officer which will be critical in strengthening our financial reporting capabilities.”
In conclusion the CEO stated, “We are tremendously proud of our accomplishments in the first half of 2007 and continue to see significant future growth opportunities for Reed’s. We believe that we are well positioned to increase our market share within the high-growth “New Age” beverage category.”
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