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Reed's Inc reported dire Q1 that saw steep declines in sales and gross margin and widening of loss as new CEO rolls up his sleeves to rethink operation of marketer of Reed's and Virgil's premium CSD brands. "We believe Reed's operating performance in Q1 should not be viewed as indicative of our expected performance for the balance of the year," urged Neal Cohane, longtime sales leader who returned to co as interim CEO following short-lived tenure of PepsiCo vet Cyrill Wallace, who blew up cost structure with pricy hires without concomitant ignition of topline. Among the moves that Cohane is scrambling to reverse is Wallace's planned dropping of Reed's and Virgil's longneck glass bottles, which drew a backlash from distributors and retailers. He's also moving redesign and reformulated canned zero-sugar offerings that drew complaints of too heavy an erythritol bite and rethinking pricing architecture with view to restoring margins. And he's using his longstanding relationships with buyers and distributors to get back on radar, including of reset windows that brand missed. "By the end of this quarter we'll have gotten ourselves back on the right track," he assured a question on call this morning. "As interim CEO, my immediate priority is to strengthen the business, improve execution and reinforce confidence across all aspects of the organization," declared Cohane. "While our first quarter results were below our expectations, we have moved quickly and decisively to address key operational and commercial areas of focus, strengthen customer and distributor relationships, streamline our cost structure and increase focus on profitability." He's promising greater transparency to constituents from trade partners to investors, noting that he won't repeat errors like failing to inform retailers of shift from sleek cans to conventional cans, consolidation move that neglected to take into account implications for UPC codes, slotting and other factors.The numbers were grim as co slashed costs, dropped underperforming sku's and re-engaged distributors and retailers. Sales plunged 28.8% to $7.1 mil. Gross margin shrank to negligible 10% from 34% as co discontinued $738K of inventory of "low-margin and non-strategic" items and their associated inputs. Operating loss widened to $6.2 mil from $1.7 mil. Norwalk, Conn-based co concluded period with $4.6 mil in cash on the books, down from $10.4 mil.Among common-sense moves Cohane is making, he's recruited Acosta's Crossmark div and its 80 commission-driven reps as external sales agent. He's also exited 3d-party Amazon fulfillment partner that was generating $1 mil in annual losses, segueing to unidentified "leading Amazon Marketplace operator." He's taken pricing where necessary to make margin structure sustainable. And with Damian Warshaw having returned to co as COO, co claims to have put behind it the out-of-stock situations that infuriated retailers and cost brands shelf space. "Short ships are essentially zero," said CFO Doug McCurdy. "We're probably managing our inventory more efficiently than the company has in many years."In concluding remarks, Cohane reminded investors that Reed's Inc has never been dogged by problem of slack demand but rather by execution issues that stunted its growth. "We have moved quickly and decisively," he said. He's rejigged ad spend behind Instacart and Walmart.com to early effect. "Reed's and Virgil's remain highly recognizable brands with strong consumer awareness and significant untapped potential in both retail and ecomm channels."

Reed's Bleak Q1 'Not Indicative' of Rest-of-Year Performance, CEO Cohane Assures Investors; Radical Remake of Co Under Way Following Ouster of Prior Leader

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