Reeds, Inc. (NASDAQ: REED) recently announced its estimates for fiscal 2007, based on an increased sales force, expanded marketing effort and public guidance issued by management. The company anticipates sales for 2007 at $13.901 million, up from a prior 2007 estimate of $13.630 million, and a jump from $10.484 million reported in 2006.
Though Reed’s gross margin of 18.98% was lower than that reported in 2006, it was an increase from a prior forecast of 17.97%; this is primarily because the company’s main co-pack production facility increased its prices. Reed’s also recently announced the expansion of its California facility which is expected to decrease freight costs.
Efforts to quickly repay its credit line resulted in a decrease in interest expense, which dropped to $0.080 million from $0.407 million in 2006, and a prior forecast of $0.182 million.
The company also reported an increase in average shares, posting 8.000 million as compared to 5.523 million in 2006; the increase is a result of the IPO that ended on December 12, 2006, as well as a June 2007 private placement.
A revised forecast for 2008 calls for the company to strengthen its sales growth rate to approximately 35.5% – this follows an increase in distribution agreements.
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