Business Context and Reporting Period
Company: REED's, INC.
Filing Type: Form 8-K (Current Report)
Date of Report: August 13, 2019
Reporting Period: Second Quarter 2019 (ended June 30, 2019)
This filing announces the Company's second-quarter 2019 results of operations and financial condition. The full details are contained in a press release furnished as Exhibit 99.1. A conference call was held on the date of filing to discuss the results.
Key Financial Metrics
Revenue, Profit, Cash Flow, Margins, Debt, Liquidity: The filing text does not provide specific numerical values for revenue, net income, cash flow, margins, debt, or liquidity. These figures are referenced as being available in the accompanying press release (Exhibit 99.1) and the Quarterly Report on Form 10-Q to be filed on or about August 13, 2019.
Non-GAAP Measure: The Company utilizes "Modified EBITDA" as a supplemental performance measure. It is defined as net income (loss) plus interest expense, depreciation and amortization, stock-based compensation, changes in fair value of warrant expense, and one-time restructuring-related costs (including employee severance and asset impairment).
Material Changes
The filing does not explicitly state the magnitude of changes versus the prior comparable period (Q2 2018) within the text of the 8-K. It notes that a reconciliation of Modified EBITDA to net income for the three-month periods ended June 30, 2019, and 2018, is included in the financial schedules of the press release.
Guidance, Outlook, Risks, and Unusual Items
Forward-Looking Statements: The filing contains forward-looking statements regarding goals and strategies, identified by terms such as "expects," "should," "believes," and "anticipates." Management cautions that actual results may differ materially due to various risks.
Risks and Uncertainties: Key risks identified include:
- Difficulty in marketing products and services.
- Maintaining and protecting brand recognition.
- Need for significant capital.
- Dependence on third-party distributors and brewers.
- Increasing costs of fuel and freight.
- Protection of intellectual property.
- Competition.
Unusual Items: The definition of Modified EBITDA indicates the potential for one-time restructuring-related costs, including employee severance and asset impairment, which are treated as adjustments to GAAP results.
Investor Verification Checklist
- Verify specific Q2 2019 revenue and net income figures in the press release (Exhibit 99.1) or the Form 10-Q.
- Review the reconciliation of Modified EBITDA to net income to understand the impact of non-GAAP adjustments.
- Confirm the details of any one-time restructuring costs or asset impairments mentioned in the financial schedules.
- Assess the impact of fuel and freight cost increases on future margins as highlighted in the risk factors.
- Listen to the archived conference call replay for management's qualitative commentary on the results.