Financial Performance - Net sales increased by 4.5% to $10.0 million compared to $9.6 million in Q1 2024[5] - Gross profit remained flat at $3.4 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 $0.7 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 $1,673 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 $0.4 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) 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 $2.4 million in Q1 2024[11] - As of March 31, 2025, the company had approximately $4.9 million in cash, down from $10.4 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) 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 $10,391 million at the beginning of the period, highlighting liquidity challenges[29] - Cash paid for interest decreased to $199 million from $318 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 $1,023 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 $3.5 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 $397 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 $125 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 $25 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) 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]
Reeds, Inc.(REED) - 2025 Q1 - Quarterly Results