Reed’s Reports Second Quarter 2025 Results

Core Insights - Reed's, Inc. reported a decline in net sales for Q2 2025, with net sales of $9.5 million compared to $11.9 million in Q2 2024, primarily due to lower order volumes from national customers [4][7] - The company experienced a significant drop in gross profit, reporting $0.8 million in Q2 2025 versus $3.8 million in the same period last year, resulting in a gross margin of 8% compared to 32% [5][8] - Management is focused on long-term growth strategies, including enhancing commercial execution, improving inventory management, and expanding distribution channels [3][7] Financial Performance - Net sales decreased to $9.5 million in Q2 2025 from $11.9 million in Q2 2024 [4][8] - Gross profit for Q2 2025 was $0.8 million, with a gross margin of 8%, impacted by $1.6 million in inventory write-offs [5][8] - Selling, general and administrative expenses rose to $5.0 million in Q2 2025 from $3.1 million in Q2 2024, driven by costs related to contract proceedings and investments in personnel and marketing [7][8] Cash Flow and Liquidity - The company used approximately $5.0 million in cash from operating activities in Q2 2025, compared to $0.9 million in the same period in 2024 [10] - As of June 30, 2025, Reed's had approximately $2.7 million in cash and $9.7 million in total debt, a decrease from $10.4 million in cash and $9.6 million in total debt at the end of 2024 [10][29] Management Strategy - The CEO emphasized the importance of rebuilding relationships with key retail partners and exploring growth opportunities in underpenetrated segments such as convenience and food service [3] - The company aims to drive sales growth within its core Reed's and Virgil's portfolios while improving margins and positioning for profitability [3][7]