Reeds, Inc.(US:REED)2025-11-04 12:30Financial Performance - Net sales increased by 4% to $7.0 million compared to $6.8 million in Q3 2024, driven by higher volumes of Reed's branded products [4][7]. - Gross profit remained flat at $1.2 million, with a gross margin of 17%, down from 18% in the prior year; excluding inventory write-offs, gross profit was $1.3 million with a margin of 19% [4][8]. - Net sales for the three months ended September 30, 2025, were $7,033 million, an increase from $6,752 million in the same period of 2024, while net sales for the nine months ended September 30, 2025, decreased to $26,585 million from $28,221 million in 2024 [29]. - Gross profit for the three months ended September 30, 2025, was $1,224 million, slightly up from $1,215 million in 2024, but gross profit for the nine months ended September 30, 2025, dropped to $5,433 million from $8,459 million in 2024 [29]. - The net loss for the three months ended September 30, 2025, was $3,982 million, compared to a net loss of $4,150 million in 2024, while the net loss for the nine months ended September 30, 2025, increased to $12,061 million from $9,035 million in 2024 [29]. - Loss per share for the three months ended September 30, 2025, was $(0.48), an improvement from $(4.91) in 2024, while for the nine months, it was $(1.54) compared to $(12.10) in 2024 [29]. Expenses and Costs - Delivery and handling costs decreased by 14% to $2.50 per case, down from $2.99 per case in Q3 2024 [4][9]. - Selling, general and administrative expenses rose to $4.2 million from $3.1 million, primarily due to investments in personnel and marketing [4][10]. - Total operating expenses for the three months ended September 30, 2025, increased to $5,327 million from $4,353 million in 2024, with significant increases in general and administrative expenses from $1,791 million to $2,861 million [29]. Cash Flow and Debt - Cash used in operations was $2.8 million, contrasting with $1.1 million of cash provided by operating activities in Q3 2024 [4][12]. - The company had cash at the end of the period of $4,136 million, down from $10,391 million at the beginning of the period [33]. - Cash flows from operating activities for the nine months ended September 30, 2025, showed a net cash used of $13,230 million, significantly higher than $2,254 million in 2024 [33]. - The company repaid approximately $650,000 of debt and refinanced its credit facility to strengthen its balance sheet [5]. Management and Strategy - Management is preparing for an anticipated uplist to a major stock exchange to enhance visibility and improve liquidity [5]. - Two key appointments were made to strengthen the leadership team, aimed at advancing the 2026 go-to-market strategy and rebranding initiatives [3]. Modified EBITDA - Modified EBITDA loss was $3.9 million, compared to a loss of $3.0 million in the same quarter last year [4][11]. - The company reported a modified EBITDA of $(3,925) million for the three months ended September 30, 2025, compared to $(2,998) million in 2024, and $(10,205) million for the nine months ended September 30, 2025, compared to $(3,323) million in 2024 [34].