Business Context and Reporting Period
Company: REED's, INC.
Filing Type: Form 8-K (Current Report)
Date of Report: November 13, 2018
Reporting Period: Third Quarter 2018 (ended September 30, 2018)
This filing announces the Company's third-quarter 2018 results of operations and financial condition. The full details are contained in the press release furnished as Exhibit 99.1.
Key Financial Metrics
The provided text does not contain specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These figures are referenced as being available in the press release (Exhibit 99.1) and the reconciliation of net income to Modified EBITDA.
Non-GAAP Measure: The Company utilizes "Modified EBITDA" as a supplemental performance measure. It is defined as net income (loss) adjusted for:
- Interest expense
- Depreciation and amortization
- Stock-based compensation
- Changes in fair value of warrant expense
- One-time employee severance costs
Material Changes and Comparisons
The filing text does not provide specific data regarding material changes versus the prior comparable period (Q3 2017). It notes that a reconciliation of net income to Modified EBITDA for the three months ended September 30, 2018, and 2017 is included in Exhibit 99.1.
Guidance, Outlook, and Risks
Management Commentary: Management considers core operating performance to be the results managers can affect through resource management. The Company will hold a conference call to discuss the results.
Forward-Looking Statements: The filing includes standard disclaimers that actual results may differ materially from projections due to various risks.
Identified Risks and Uncertainties:
- 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
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific Q3 2018 revenue, net income, and Modified EBITDA figures.
- Verify the reconciliation of GAAP net income to Modified EBITDA to understand the magnitude of non-recurring adjustments.
- Confirm the Company's liquidity position and capital needs as discussed in the press release.
- Assess the impact of fuel and freight cost increases on future margins.
- Listen to the archived conference call replay for management's qualitative assessment of the quarter.