Reeds (OTCMKTS:REED) executives said the company made progress in stabilizing operations during the fourth quarter of 2025, pointing to sequential improvements in net sales, gross margin, and net loss as early signs that recent execution and cost initiatives are beginning to take hold.
On the call, Interim CEO and COO Neal Cohane also addressed a leadership transition, confirming that former CEO Cyril Wallace stepped down. Cohane said he will serve as interim CEO while continuing as COO and joining the board, as the company conducts a search for a permanent chief executive.
Management highlights operational improvements and channel momentum
He also outlined efforts to strengthen distribution and shelf presence while driving efficiency across the supply chain and product portfolio. Initiatives mentioned included optimizing the manufacturing network, improving plant productivity, tightening operational controls to better align production with demand, and enhancing sourcing through supplier renegotiations and improved procurement discipline. Cohane added that the company is pursuing additional per-unit cost opportunities, including packaging optimization, freight and logistics efficiencies, and SKU rationalization.
Operationally, Cohane said the company continued to evaluate finished goods inventory, including addressing slower-moving and obsolete product as part of a portfolio simplification effort. He also described logistics “rebalancing” work to optimize inventory placement across regions with the goal of reducing freight distances, enhancing service levels, and minimizing out-of-stocks.
Fourth-quarter financial results
Chief Financial Officer Douglas McCurdy reported fourth-quarter 2025 net sales of $7.5 million, down from $9.7 million in the year-ago quarter. McCurdy said the decline was primarily driven by lower volumes with recurring national customers as well as higher promotional and other allowances.
Gross profit in the fourth quarter was $1.5 million, compared to $2.9 million a year earlier. Gross margin was 20% versus 30% in the prior-year quarter, which McCurdy attributed primarily to inventory write-offs and higher cost of goods sold.
- Delivery and handling costs: $1.1 million, down 35% from $1.7 million; 14% of net sales ($2.46 per case) versus 17% ($3 per case) a year ago.
- SG&A: $4.0 million, down 19% from $4.9 million, primarily due to lower contract proceedings and asset impairments.
- Net loss: $3.8 million, or -$0.44 per share, improved from a $4.1 million loss, or -$1.33 per share, in the year-ago quarter.
- EBITDA: -$3.6 million versus -$3.1 million in the prior-year quarter.
McCurdy said cash used in operating activities was $3.8 million for the fourth quarter, compared with $3.9 million in the year-ago quarter. As of December 31, 2025, the company had approximately $10.4 million of cash and $9.3 million of total debt, net of capitalized financing fees, compared with $10.4 million of cash and $9.6 million of total debt at December 31, 2024.
Product pipeline and brand building initiatives
Looking ahead, Cohane said the company is targeting underpenetrated channels, particularly food service and convenience, which he described as “white space opportunities” that could broaden consumption occasions and support trial and awareness.
He also discussed multiple product and marketing initiatives planned for 2026:
- New Ginger Ale extensions: Reed’s Ginger Ale Cranberry and Blackberry are slated for launch in Q2 2026 as extensions of the company’s top-selling Ginger Ale SKU.
- Brand performance claim: Cohane said Reed’s Ginger Ale remains the number one premium ginger ale in the U.S. and is up 13.7% in dollar sales over the past 52 weeks.
- Non-alcoholic mixers: A new mixers line is planned for early Q3 2026, which Cohane said could provide incremental sales opportunities in the back half of the year.
- Digital shelf expansion: Cohane said the company went live in March 2026 across Instacart, walmart.com, and albertsons.com, supported by sponsored search, sponsored products, and banner advertising.
- Social media strategy: Launched in Q1 2026, including a partnership with retired NFL player Hayden Hurst and other influencers, with a stated goal of reaching more than 100,000 viewers per month.
Internationally, Cohane said the company plans to continue expansion into Asia and will exhibit at the Sugar and Wine Trade Show in Chengdu, China. He also introduced a new product called “U Oxygen,” described as a modern energy drink that builds on a natural ginger base and includes astragalus and ginseng.
Capital markets update and profitability focus
Cohane said the company completed a $10 million underwritten public offering and uplisted its shares to the NYSE American, calling it a milestone intended to strengthen the balance sheet and improve financial flexibility for distribution expansion, brand investment, and operational improvements. He added that the uplisting should raise visibility within the investment community and broaden access to institutional investors.
In the Q&A, Cohane said the company remains focused in 2026 on improving shelf placements and in-store velocity, emphasizing attention on customers and distributors. On profitability, he said management is focused on a combination of reducing expenses and driving volume growth. Asked about the timing of a “Soda Smarter” launch, Cohane said the company is working first on the new mixers line and then expects to return to Soda Smarter with an emphasis on improving flavors, formulas, and execution.
Cohane closed by reiterating that the fourth quarter showed progress in reinforcing the operational foundation, while noting there is still work to do to deliver more consistent, profitable growth.
About Reeds (OTCMKTS:REED)
Reed’s, Inc is a U.S.-based beverage company specializing in the development, production and distribution of craft soft drinks, mixers and functional beverages that feature real ginger and other natural ingredients. The company’s flagship Reed’s Ginger Brew line includes Original, Extra and Stronger formulations, each brewed using fresh ginger root to deliver a balance of spicy flavor and perceived health benefits. Reed’s also markets a portfolio of craft sodas under the Virgil’s brand, offering varieties such as Root Beer, Craft Cola and Vanilla Cream Soda without artificial sweeteners or preservatives.
Founded in 1989 by Christopher J.
