0001493152-26-012679
SEC filingReed's, Inc. reported net sales of $34.1 million for FY 2025, a 10% decline from $37.954 million in FY 2024, driven by lower volumes across Reed’s (down 3% to 1,325 cases) and Virgil’s (down 18% to 626 cases), partially offset by a 1% price increase to $20.94 per case. Gross profit fell 39% to $7.0 million, with gross margin contracting to 20% from 30%, primarily due to $2.0 million in inventory write-offs related to product portfolio optimization and higher cost of goods sold per case ($13.89 vs. $12.46). Operating expenses rose 13% to $22.1 million, leading to a loss from operations of -$15.1 million, worsening from -$8.1 million prior year. Net loss widened 20% to -$15.8 million, or -$2 per share (basic and diluted), compared to -$13.2 million or -$9.81 per share in 2024. Balance sheet shows strengthened liquidity with cash at $10.4 million and total assets of $23.3 million, supported by $17.3 million in net financing inflows including stock sales and loans. Operating cash use intensified to -$17.0 million amid investments in growth. Forward-looking, management emphasizes distribution expansion, international growth in Asia-Pacific, operational efficiencies, and innovation in functional sodas, amid risks from supply chain volatility and competition.
Reed's, Inc. (REED) posted FY 2025 net sales of $34.1M, down 10% YoY from $37.954M, reflecting volume declines in Reed’s (3% to 1,325 cases) and Virgil’s (18% to 626 cases). Gross profit dropped 39% to $7.0M (20% margin vs. 30% prior), impacted by $2.0M inventory write-offs and COGS rise to $27.1M (80% of sales). Total operating expenses increased 13% to $22.1M, with delivery/handling at $5.4M (-8% YoY), selling/marketing $5.3M (+20%), and G&A $11.3M (+24%). Loss from operations widened to -$15.1M from -$8.1M. Net loss was -$15.8M (-$2/share basic/diluted), up 20% YoY from -$13.152M (-$9.81/share), after $414K other income and $1.1M interest expense. Financing activities provided $17.3M net cash, boosting ending cash to $10.4M on a $23.3M asset base.
Net sales fell 10% to $34.1M, with gross billings down 8% to $40.8M amid higher promotional allowances (17% of gross vs. 14%). Reed’s cases declined 3%, Virgil’s 18%, offset by 1% price per case rise to $20.94. No formal segments reported, but brand-level volumes highlight portfolio challenges. Management cites lower recurring national customer volumes and portfolio optimization. Growth drivers include channel expansion (mass, club, convenience), DSD network buildup, and Asia-Pacific entry via Reed’s (Asia) Limited subsidiaries (no 2025 sales). International strategy focuses on local co-packing; U.S. sales via co-packers and distributors to 32,000+ outlets.
Gross margin compressed to 20% from 30% due to $2.0M inventory write-offs, COGS up 2% to $27.1M ($13.89/case vs. $12.46). Delivery/handling stable at $2.75/case (16% of sales). Operating expenses at 65% of sales vs. 51% prior, driven by G&A (+24% on personnel/contract costs) and marketing (+20%). No operating margin stated; loss from operations at -44% of sales. EBITDA was -$14.6M vs. -$7.3M prior, excluding interest, taxes, D&A.
Operating cash use surged to -$17.0M from -$6.1M, reflecting losses, $2.0M inventory writedown, and working capital shifts (e.g., AR down $743K, AP down $3.3M). Investing used -$0.3M (PPE purchases). Financing provided $17.3M via $18.2M stock sales, $9.5M senior loan, $4.1M SAFE, offset by credit line activity. Net cash +$33K; ending cash $10.4M (BS), though cash flow notes $603K end (possibly prior). Total assets $23.3M (inventory $8.0M, AR $2.3M); liabilities $14.2M (senior loan $9.2M); equity $9.2M. Current ratio supportive with $21.5M assets vs. $13.4M liabilities.
Management prioritizes distribution expansion, Asia-Pacific growth (ongoing investments), efficiency (aluminum cans, logistics partnership), and innovation (functional sodas launched 2025). Expects sales growth via placements, DSD, international. Risks include supply chain inflation (freight $2.75/case), competition, customer concentration (top 3 at 50% sales), debt covenants ($9.2M senior loan due 2026), and liquidity needs. Sufficient cash for 12+ months per operating plan, but may seek more funding for growth. Productivity initiatives target cost reductions; no quantitative guidance.