REED Reeds Inc (QX)

Reed's, Inc. (NASDAQ: REED) (OTCBB: REEDP), maker of the top-selling sodas in natural food stores nationwide, today announced its financial results for 2010.

Financial Highlights:

--  Sales increased 34% to $20.4 million.
--  Gross profit was 21% of sales during 2010, as compared to 24% in 2009,
    reflecting start up costs incurred during the period.
--  Operating expenses were about the same in 2010, compared to 2009.
--  Modified EBITDA was $456,000 in 2010, as compared to a modified EBITDA
    loss of $306,000 in 2009. (See modified EBITDA table at end of this
    release for further non-GAAP information).
--  Net loss for 2010 narrowed to $1,310,000, or $0.14 per share, from
    $2,559,000 in 2009.
--  Working capital at December 31, 2010 was $1.8 million, as compared to
    $2.0 million at December 31, 2009.
--  Cash availability was $1.1 million at December 31, 2010, as compared
    to $1.3 million at December 31, 2009.

"We are cautiously exuberant with our results for the year," stated Chris Reed, Founder, Chairman and CEO of Reed's, Inc. "Our growth has been the result of a lot of hard work developing the channels for our excellent brands." Mr. Reed added, "Our strategy of diversifying with private label production is serving to fill production capacity as well as advance our branded business. We have increased our capabilities, since we are constantly developing formulas, brands and packaging. As a result, we have some new branded products in the pipeline for 2011 that are exciting and unique."

James Linesch, Reed's Chief Financial Officer, said, "Our 34% sales growth was driven by an over 17% increase in our branded business. Margins for our branded business held constant overall in 2010, as compared to 2009, despite certain raw materials cost increases. Our second half 2010 margins were negatively impacted by start-up costs on our private-label business and, to a lesser extent; on product rollout costs on our new