Reed's, Inc. Announces Record Revenues for Fiscal 2008
Released: 03/30/09 09:00 AM EDT
Company Reports Increases in Revenues, Gross Profits, and Improvements in Gross and Operating Margins

LOS ANGELES, CA -- (Marketwire) -- 03/30/09 -- Reed's, Inc. (NASDAQ: REED), maker of the top-selling sodas in natural food stores nationwide, released financial results for the year ending December 31, 2008 after the market closed on Friday, March 27th. Results included record revenue and a gross profit increase of 68% over 2007 to $3.4 million.

The Company's outlook for 2009 anticipates gross profit improvements of 20%-40%, a further reduction in operating expenses (OPEX) of $2.5 million for full year 2009 and operating cash flow of breakeven by the end of the year.

Chris Reed, Founder and CEO commented, "Our success in natural foods is transitioning to the mainstream and it is showing in our financial results." Mr. Reed added, "Our Company is currently being valued at less than one times revenues, while, as recently as December 2008 private beverage companies were receiving two to three times revenues in sales transactions; and, in spring of 2007 Glaceau, the maker of Vitamin Water, sold in a cash deal valued at $4.1 billion, which is over 11 times its prior year revenues."

Mr. Reed continued, "Reed's products are premium products. As we continue to grow, we believe the market will recognize the strength of our brand, and will value our company accordingly. In the meantime we will continue to move our company forward to add value for our shareholders."

Fiscal 2008 Highlights:

-- Net Sales increased 17% to $15.3 million compared to 2007

-- Gross Margin expands 700 basis points to over 22%

-- Gross Profit increases 68% over 2007 to $3.4 million

-- Implemented cost cutting initiatives during 2008 that decreased
   operating expenses (OPEX) from $2.5 million in Q1 to $1.4 million in Q4

-- Refocused and strengthened Executive management and sales team

-- Expanded product line to include new 12-pack packaging, Virgil's Orange
   Cream Soda and diet Virgil's sodas

-- Announced the planned release of Reed's Natural Energy Elixir, giving
   the company presence in one of the fastest growing segments of the beverage

Fiscal 2009 Outlook:

-- Anticipates additional improvement in 2009 gross profit of 20%-40%

-- Expects to achieve over $2.5 million in additional OPEX savings during
   2009 over 2008

-- Anticipates 2009 operating cash flow to be breakeven as a result of
   gross profit expansion and additional operating expense savings

For more complete information, please see the company's 10K report as filed with the SEC at

About Reed's, Inc.

Reed's, Inc. makes the top selling sodas in natural food markets nationwide and is currently selling in 10,500 supermarkets in natural foods and mainstream. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. In addition, the Company owns the top selling root beer line in natural foods, the Virgil's Root Beer product line, and the top selling cola line in natural foods, the China Cola product line. Other product lines include: Reed's Ginger Candies and Reed's Ginger Ice Creams.

Reed's products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada. For more information about Reed's, please visit the company's website at: or call 800-99-REEDS.

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Some portions of this press release, particularly those describing Reed's goals and strategies, contain "forward-looking statements." These forward-looking statements can generally be identified as such because the context of the statement will include words, such as "expects," "should," "believes," "anticipates" or words of similar import. Similarly, statements that describe future plans, objectives or goals are also forward-looking statements. While Reed's is working to achieve those goals and strategies, actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These risks and uncertainties include difficulty in marketing its products and services, maintaining and protecting brand recognition, the need for significant capital, dependence on third party distributors, dependence on third party brewers, increasing costs of fuel and freight, protection of intellectual property, competition and other factors, any of which could have an adverse effect on the business plans of Reed's, its reputation in the industry or its expected financial return from operations and results of operations. In light of significant risks and uncertainties inherent in forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by Reed's that they will achieve such forward-looking statements. For further details and a discussion of these and other risks and uncertainties, please see our most recent reports on Form 10-KSB and Form 10-Q, as filed with the Securities and Exchange Commission, as they may be amended from time to time. Reed's undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.

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