Q1 2024 Reed's Inc Earnings Call Transcript
Key Points
- Reed's Inc (REED) reported a significant improvement in gross margin, increasing by more than 1,000 basis points year-over-year.
- Operating expenses were reduced by 23% compared to the same period last year, reflecting effective cost management.
- Sales of key products like Reed's Ginger Beer and Ginger Ale showed solid growth, with increases of 8% and 9% respectively.
- The company successfully renegotiated freight contracts, leading to a 29% reduction in delivery and handling expenses and over $1 million in annualized cost savings.
- Reed's Inc (REED) has expanded distribution and product offerings, including new partnerships with Sprouts and Whole Foods, and launched new products in the ready-to-drink alcohol category.
- Net sales for Q1 2024 were down to $9.6 million from $11.2 million in the previous year, primarily due to tightened credit terms impacting raw material purchases.
- The company experienced an inflated rate of short order shipments due to supply chain constraints.
- Cash used in operations increased to $2.4 million, compared to a positive cash flow from operations of $1.1 million in the same period last year.
- Reed's Inc (REED) is carrying a significant debt load with $26 million in total debt, which includes a convertible note and revolving line of credit.
- Despite improvements, the company still reported an operating loss of $2.6 million for the quarter, although this was an improvement over the previous year.
Good afternoon, and welcome to Reedâs first-quarter 2024 earnings conference call for the three months ended March 31, 2024. My name is Chris, and I will be your conference operator for today. We will have prepared remarks from Norman Snyder, Reed's, Chief Executive Officer; and Joann Tinnelly, Reed's, Chief Financial Officer.
Following their remarks, they will take your questions. Before we begin, please take note of the company's cautionary statement. Today's call will include forward-looking statements, including statements about Reed's business plans and 2024 guidance. Forward looking statements inherently involve risks and uncertainties and only reflect management's view as of today, May 14, 2024, and the company is under no obligation to update them.
When discussing results the presenters may refer to non-GAAP measures, which exclude certain items from reported results. Please refer to Reed's first quarter 2024 earnings release on Reed's investor website at investor.reedsinc.com and its first quarter 2024 Form 10-Q expected to be available on the website on March 14, 2024, for
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