Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Reed's Inc (REED, Financial) experienced strong order demand from retail partners in Q3 2024.
- The company is launching a new line of 'better for you' beverages featuring organic ginger and adaptogens, with positive feedback from key retailers.
- Reed's Inc (REED) secured over 5,000 new points of distribution, including national and regional approvals for product transitions.
- The company has solidified its co-packer network to optimize freight efficiency for 2025.
- Reed's Inc (REED) has improved its balance sheet and liquidity position with a new $10 million revolving credit facility.
Negative Points
- Production limitations and short shipments impacted net sales by more than $4 million in Q3 2024.
- Net sales for Q3 2024 decreased to $6.8 million from $11.9 million in the year-ago quarter.
- Gross profit and gross margin significantly decreased compared to the previous year.
- The company faced tightened credit terms from suppliers, affecting its ability to purchase raw materials.
- Reed's Inc (REED) withdrew its full-year 2024 outlook due to ongoing inventory challenges.
Q & A Highlights
Q: How quickly will Reed's Inc. be able to access the new line of capital, and how soon will it translate into additional revenue?
A: Norman E. Snyder, CEO, stated that they will have access to the new line of capital today, as all documentation was finalized the previous evening. They have already started building and shipping inventory, aiming to be fully stocked by the end of the year to meet order demand in 2025.
Q: How confident is Reed's Inc. in retaining their current retail listings?
A: Norman E. Snyder, CEO, expressed confidence in retaining listings due to proactive communication and transparency with key retailers. They have been managing short shipments strategically and have communicated their plans and expectations for 2025.
Q: How is the Ready-to-Drink (RTD) alcohol product performing?
A: Norman E. Snyder, CEO, mentioned that they scaled back distribution to focus on locations where the Reed's portfolio is known. They have seen success in these areas and continue to build distribution slowly, which they believe is a prudent approach.
Q: Does the SG&A line in this quarter include any one-time expenses?
A: Joan Tiny, CFO, clarified that there were no one-time expenses in the SG&A line for this quarter. Norman E. Snyder added that last quarter's figures were affected by reversals of some accruals, which is why the comparison may not be apples-to-apples.
Q: What drove the increase in SG&A expenses this quarter?
A: Joan Tiny, CFO, attributed the increase to general expenses and additional consultants. Norman E. Snyder noted that last quarter's SG&A was lower due to reversals of some accruals, affecting the comparison.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
