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Reeds, Inc.(REED) - 2025 Q1 - Quarterly Results
REEDReeds, Inc.(REED)2025-05-13 21:24

Financial Performance - Net sales increased by 4.5% to 10.0millioncomparedto10.0 million compared to 9.6 million in Q1 2024[5] - Gross profit remained flat at 3.4million,withagrossmarginof33.93.4 million, with a gross margin of 33.9%, down from 35.6% in the previous year[7] - Operating loss increased to 1.7 million, compared to a loss of 0.7millioninQ12024[9]−Thecompanyreportedanetlossof0.7 million in Q1 2024[9] - The company reported a net loss of 2,031 million for the three months ended March 31, 2025, compared to a net loss of 1,673millionforthesameperiodin2024,representinganincreaseinlossofapproximately21.51,673 million for the same period in 2024, representing an increase in loss of approximately 21.5%[30] - Modified EBITDA loss was 1.6 million, worsening from a loss of 0.4millioninthesamequarterlastyear[10]−ModifiedEBITDAforthethreemonthsendedMarch31,2025,was0.4 million in the same quarter last year[10] - Modified EBITDA for the three months ended March 31, 2025, was (1,634) million, a significant decline from (370)millioninthesameperiodof2024,indicatingadeteriorationinoperationalperformance[30]CashFlowandLiquidity−Cashusedinoperatingactivitieswasapproximately(370) million in the same period of 2024, indicating a deterioration in operational performance[30] Cash Flow and Liquidity - Cash used in operating activities was approximately 5.4 million, up from 2.4millioninQ12024[11]−AsofMarch31,2025,thecompanyhadapproximately2.4 million in Q1 2024[11] - As of March 31, 2025, the company had approximately 4.9 million in cash, down from 10.4millionattheendof2024[11]−Netcashusedinoperatingactivitiesincreasedto10.4 million at the end of 2024[11] - Net cash used in operating activities increased to (5,362) million for the three months ended March 31, 2025, compared to (2,395)millionintheprioryear,reflectingaworseningcashflowsituation[29]−Cashattheendoftheperiodwas(2,395) million in the prior year, reflecting a worsening cash flow situation[29] - Cash at the end of the period was 4,862 million, a decrease from 10,391millionatthebeginningoftheperiod,highlightingliquiditychallenges[29]−Cashpaidforinterestdecreasedto10,391 million at the beginning of the period, highlighting liquidity challenges[29] - Cash paid for interest decreased to 199 million from 318millionyear−over−year,indicatingapotentialreductionindebtobligationsorinterestrates[29]−Thecompanyincurredinterestexpensesof318 million year-over-year, indicating a potential reduction in debt obligations or interest rates[29] - The company incurred interest expenses of 289 million for the three months ended March 31, 2025, a decrease from 1,023millionintheprioryear,indicatingareductionindebtservicingcosts[30]OperationalEfficiencyandManagement−Deliveryandhandlingcostswere1,023 million in the prior year, indicating a reduction in debt servicing costs[30] Operational Efficiency and Management - Delivery and handling costs were 1.6 million, representing 16.2% of net sales, compared to 15.7% in Q1 2024[8] - Selling, general and administrative expenses rose to 3.5millionfrom3.5 million from 2.6 million, driven by investments in growth initiatives[9] - The company aims to improve operational efficiency, reducing short shipments from approximately 20% to roughly 2% by April 2025[3] - Total EBITDA adjustments for the three months ended March 31, 2025, amounted to 397million,downfrom397 million, down from 1,303 million in the same period of 2024, suggesting increased operational inefficiencies[30] - The company experienced a decrease in accounts receivable by 125million,whileinventorysawasignificantdecreaseof125 million, while inventory saw a significant decrease of 4,194 million, indicating potential issues with sales or inventory management[29] - The company reported a significant write-down in inventory of 25million,comparedto25 million, compared to 783 million in the previous year, reflecting improved inventory management practices[29] Investment Activities - The company’s cash flows from investing activities were (74)millionforthethreemonthsendedMarch31,2025,comparedto(74) million for the three months ended March 31, 2025, compared to (18) million in the prior year, indicating increased investment activity despite cash flow challenges[29] - New product launches include functional beverages, which are expected to drive growth in 2025[2]