Reed's Inc (REED) 2022 Q2 法說會逐字稿

Good afternoon, and welcome to the Reed's Second Quarter 2022 Earnings Conference Call for the period ending June 30, 2020. My name is Sarah, and I will be your conference call operator for today.

下午好，歡迎參加 Reed's 2022 年第二季財報電話會議，會議日期截至 2020 年 6 月 30 日。我叫 Sarah，是今天的電話會議主持人。

We will have prepared remarks from Norman Snyder, Reed's Chief Executive Officer; and Tom Spisak, Reed's Chief Financial Officer. Following their remarks, we will take your questions.

我們已經準備好了Reed執行長Norman Snyder和財務長Tom Spisak的演講稿。發言結束後，我們將回答大家的提問。

I would like to remind listeners that this conference call will include forward-looking statements. Forward-looking statements are only current predictions and are subject to known and unknown risks and uncertainties and other factors that may cause actual results, levels or activity, performance or achievements to be materially different from those anticipated by such statements. These factors include, but are not limited to, Reed's ability to manage growth, manage debt and meet development goals, Reed's ability to protect its supply chain in light of disruption caused by elevated freight costs and other impediments, the ability and cost of capital to finance our working capital needs and growth plans; reduction in demand for products; dependence on third-party manufacturers and distributors; changes in competitive environment; future business outlook, including the potential impact of COVID-19 on Reed's business and results of operations and other information detailed from time to time in Reed's filings with the United States Securities and Exchange Commission.

我想提醒各位聽眾，本次電話會議將包含前瞻性陳述。前瞻性陳述僅為目前預測，受已知和未知風險、不確定性以及其他因素的影響，這些因素可能導致實際結果、水準或活動、績效或成就與此類陳述的預期有重大差異。這些因素包括但不限於：Reed 管理成長、管理債務和實現發展目標的能力；Reed 在運費上漲和其他障礙造成中斷的情況下保護其供應鏈的能力；為我們的營運資金需求和增長計劃提供資金的能力和資本成本；產品需求的減少；對第三方製造商和分銷商的依賴；競爭環境的變化；未來業務前景，包括 COVID-19 對經營業績的影響；不時向美國證券交易委員會提交的文件中詳述的其他資訊。

These statements, including financial guidance, involve risks and uncertainties that may cause actual results and trends to differ materially from the company's forecast. The achievement or success of the matters covered by such forward-looking statements, include future financial guidance, involves risks, uncertainties and assumptions, many of which involve factors or circumstances that are beyond Reed's control.

這些聲明（包括財務指引）涉及風險和不確定性，可能導致實際結果和趨勢與公司預測有重大差異。此類前瞻性聲明所涵蓋事項（包括未來財務指引）的成就或成功涉及風險、不確定性和假設，其中許多涉及Reed無法控制的因素或情況。

Fiscal 2022 guidance reflects year-to-date business trends, including the ongoing operating environment related to COVID-19. The COVID-19 pandemic and its related impacts could continue to create many incremental potential business risks, including potential impacts to Reed's ability to access raw materials, production, transportation and/or other logistics needs, as well as potential inflation related to all aspects of supply chain and logistics, which cannot be reasonably estimated and may not be completely factored into current fiscal 2022 guidance. Gross margin guidance assumes our known pricing for ingredients, packaging and production costs, each of which has been and could continue to be impacted by factors related to COVID-19.

2022財年指引反映了年初至今的業務趨勢，包括與COVID-19相關的持續營運環境。 COVID-19疫情及其相關影響可能會繼續造成許多潛在的業務風險，包括對Reed獲取原材料、生產、運輸和/或其他物流需求的能力的潛在影響，以及與供應鏈和物流各個環節相關的潛在通膨。這些因素無法合理估計，且可能無法完全計入目前的2022財年指引。毛利率指引是基於我們已知的原料、包裝和生產成本定價，而這些成本都已受到並可能繼續受到與COVID-19相關因素的影響。

Financial guidance should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. For more information, please refer to the risk factors discussed in Reed's most recently filed Annual Report on Form 10-K and the Form 10-Q to be filed with the SEC today.

財務指引不應被視為取代根據公認會計準則 (GAAP) 編制的完整財務報表。欲了解更多信息，請參閱 Reed 最新提交的 10-K 表格年度報告以及將於今日向美國證券交易委員會 (SEC) 提交的 10-Q 表格中討論的風險因素。

Although management believes that the expectations reflected in forward-looking statements are reasonable, management cannot guarantee future results, levels of activity, performance or achievements. In addition, any projections as to the company's future performance represents management's estimates as of today, August 11, 2022. Reed's assumes no obligation to update any forward-looking statements or information, which speaks as of their respective dates.

儘管管理層認為前瞻性陳述中反映的預期合理，但管理層無法保證未來的績效、活動水準、績效或成就。此外，任何對公司未來業績的預測均代表管理階層截至2022年8月11日的估計。 Reed's不承擔更新任何前瞻性聲明或資訊的義務，這些陳述或資訊僅代表其各自日期的觀點。

Additionally, please note non-GAAP financial measures referenced during the call are reconciled to the comparable GAAP measures, financial measures in the press release and supplemental materials filed with the SEC and is posted on Reed's investor website at investor.reedsinc.com. Modified EBITDA is presented because management believes it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of core operating performance.

此外，請注意，電話會議中引用的非公認會計準則 (non-GAAP) 財務指標已與可比公認會計準則 (GAAP) 指標、新聞稿中的財務指標以及提交給美國證券交易委員會 (SEC) 的補充材料進行了調節，並已發佈在 Reed 的投資者網站 investor.reedsinc.com 上。之所以採用修正後的 EBITDA，是因為管理層認為，透過剔除我們認為不反映核心營運績效的項目，可以幫助投資人和分析師以一致的方式比較我們不同報告期間的績效。

The performance of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP. And Reed's non-GAAP measures may be different from non-GAAP measures used by other companies. Reconciliations of non-GAAP measures to GAAP measures, as well as the definition of each measure, their limitations and our rationale for using them can be found in this afternoon's press release and in Reed's SEC filings.

本非公認會計準則 (non-GAAP) 財務資訊並非旨在單獨評估業績，亦不可將其視為替代或優於根據公認會計準則 (GAAP) 編制和呈現的財務資訊。 Reed 的非公認會計準則 (non-GAAP) 指標可能與其他公司使用的非公認會計準則 (non-GAAP) 指標有所不同。非公認會計準則 (non-GAAP) 指標與公認會計準則 (GAAP) 指標的對照表，以及每項指標的定義、局限性以及我們使用它們的理由，請參閱今天下午的新聞稿以及 Reed 提交給美國證券交易委員會 (SEC) 的文件。

I will now turn the call over to Mr. Snyder.

現在我將把電話轉給史奈德先生。

Thank you, and good afternoon, everyone. We appreciate you joining us today to discuss our second quarter 2022 results.

謝謝大家，下午好！感謝大家今天與我們一起討論2022年第二季的業績。

During the second quarter, we returned to more than 20% revenue growth, driven by strong demand across our product portfolio, specifically Reed's Ginger Beer, Reed's Ginger Ale, Reed's Classic Mule and our Virgil's Zero Sugar line. While net sales were generally in line with our expectations, the effects of various unprecedented supply chain headwinds that began during the latter half of 2021 and continued into 2022, resulted in one-time elevated cost of goods sold and transportation expenses, offsetting the benefit of our cost-saving initiatives implemented earlier this year.

第二季度，我們的營收成長恢復至20%以上，這得益於我們產品組合的強勁需求，尤其是Reed's薑汁啤酒、Reed's薑汁汽水、Reed's經典騾子以及Virgil's零糖系列。雖然淨銷售額總體符合我們的預期，但始於2021年下半年並持續至2022年的各種前所未有的供應鏈逆風，導致銷售成本和運輸費用一次性增加，抵消了我們今年早些時候實施的成本節約舉措帶來的效益。

We believe that we have strategically navigated through these turbulent times and during the second half of 2022. We anticipate lower cost of goods, resulting in improved gross margin and lower freight expenditures. We will also continue to tightly control sales and marketing and general and administrative costs, resulting in improved operating results and positive cash flow. We'll have more to discuss on the supply chain and the key factors driving margin and cash flow for the second half of the year, but let's first take a closer look at our product portfolio.

我們相信，我們已經策略性地度過了這些動盪時期以及2022年下半年。我們預計商品成本將下降，從而提高毛利率並降低運費支出。我們也將持續嚴格控制銷售、行銷以及一般及行政成本，從而改善營運績效並實現正現金流。我們將就供應鏈以及推動下半年利潤率和現金流的關鍵因素進行更多討論，但首先讓我們仔細看看我們的產品組合。

Core Ginger Beer sales continued to perform well during the quarter and were up nearly 15% year-over-year, led by 113% growth in Ginger Beer cans contained in year-to-date multi-outlet and convenience or MULO retail scan data. MULO contains the following channels; food, grocery, drug, mass, Walmart, Club, dollar stores and military. Our relatively new Ginger Ale business was also up as sales increased 60% from the year ago quarter. In addition, as reflected in MULO scan data, our Ginger Ale is up 57% year-to-date and 48% in the 4 weeks ending at the close of Q2, reflecting the consistently growing demand for this new product line. As a reminder, the Ginger Ale category in measured sales is approximately $1.2 billion and growing, which represents a significant opportunity for REITs to capture additional market share.

本季度，核心薑汁啤酒銷量持續表現良好，年增近 15%，其中年初至今的多門市和便利商店或 MULO 零售掃描數據顯示，薑汁啤酒罐裝銷量增長 113%。 MULO 包含以下管道：食物、雜貨、藥品、大眾、沃爾瑪、俱樂部、一元商店和軍隊。我們相對較新的薑汁汽水業務也有所成長，銷售額較去年同期成長 60%。此外，正如 MULO 掃描數據所反映的，我們的薑汁汽水銷量年初至今增長 57%，截至第二季度末的 4 週內增長了 48%，反映出對這一新產品線的持續增長的需求。提醒一下，薑汁汽水類別的銷售額約為 12 億美元並且還在成長，這對房地產投資信託基金 (REIT) 奪取更多市場份額來說是一個重大機會。

We have also made significant headway in our RTD alcohol portfolio, both from a sales and product development perspective. I'm happy to share that as of last month, we are now registered to sell our alcohol portfolio in 46 states with the remaining 4 states coming online shortly. During the second quarter, our Classic Mule sales were up 5 times compared to the prior year and up more than 60% sequentially from Q1 2022. Over the last 8 months, we added an estimated 3,300 doors that purchased Reed's Classic Mule and more recently Stormy Mule. We are currently identifying the doors that are generating the highest velocity per week and we are developing more localized marketing plans with our distributors to broaden our reach through retail post off, sales incentives and in-store consumer demos.

我們的即飲酒類產品組合也取得了顯著進展，無論是在銷售或產品開發方面。我很高興地告訴大家，截至上個月，我們已在46個州註冊銷售我們的酒類產品，其餘4個州也即將上線。第二季度，我們的經典騾子（Classic Mule）銷量較去年同期成長5倍，較上季成長超過60%。在過去的8個月裡，我們新增了約3,300家門市，購買了Reed's經典騾子（Classic Mule）以及最近的Stormy Mule。我們目前正在確定每週銷售速度最快的門市，並正在與經銷商制定更在地化的行銷計劃，透過零售郵寄、銷售激勵和店內消費者演示等方式擴大我們的覆蓋範圍。

Some chains where you will find our new meals include Whole Foods, Total Wine, Sprouts, Smart and Final, Food City, Railings and Natural Groceries, just to name a few with many more to follow. We are currently meeting jointly with our distributors with many national and retail chains, we head into category review season in the fall.

您可以在 Whole Foods、Total Wine、Sprouts、Smart and Final、Food City、Railings 和 Natural Groceries 等連鎖店找到我們的新餐點，這只是其中幾個例子，未來還會有更多合作。我們目前正在與許多全國連鎖店和零售連鎖店的經銷商進行聯合會議，秋季將進入品類評估季。

The RTD Cocktail and hard seltzers categories and measured sales is approximately $7 billion plus and growing, which also represents a significant opportunity for Reed's. At the end of the second quarter. As planned, we launched our new Hard Ginger Ale with several of our distribution partners in California, Florida, New York, Massachusetts and many other states. Although shipments were minimal as expected, we planned to further increase distribution in the second half of the year with our Reed's Hard Ginger Ale gains entry into national and regional chains.

即飲雞尾酒和硬蘇打水類別的銷售額約為70多億美元，而且還在成長，這對Reed's來說也是一個重大機會。在第二季末，我們按計劃與加州、佛羅裡達州、紐約州、麻薩諸塞州和其他許多州的多家分銷合作夥伴一起推出了新款硬薑汁汽水。儘管出貨量與預期一樣少，但我們計劃在下半年進一步擴大分銷，讓Reed's硬薑汁汽水進入全國和區域連鎖店。

Our consumer research indicates that Reed's Hard Ginger Ale has high purchase intent with both RTD factor and current Ginger Ale drinkers that use it as a mixer, and the early sell through data for July is very encouraging. In addition to our Hard Ginger Ale, we also released our new Stormy Mule and issued a press release earlier today, which is our take on the iconic Dark and Stormy Cocktail. The initial launch included over 180 Safeway, Albertsons and Sprouts locations across the west coast. As with our Hard Ginger Ale, sales for the quarter were also minimal. We plan to expand distribution of the Stormy Mule with our regional partners into new regions throughout with our channel partners into new regions throughout the second half of 2022.

我們的消費者研究表明，Reed's 硬薑汁汽水無論是在即飲型消費者中，還是在將其作為混合飲料的現有薑汁汽水飲用者中，都擁有很高的購買意向，7 月份的早期銷售數據也令人鼓舞。除了硬薑汁汽水之外，我們還推出了新款 Stormy Mule，並在今天早些時候發布了新聞稿，這是我們對標誌性的 Dark and Stormy Cocktail 的詮釋。該產品首次在西海岸 180 多家 Safeway、Albertsons 和 Sprouts 門市上市。與硬薑汁汽水一樣，本季的銷量也很低。我們計劃在 2022 年下半年與區域合作夥伴一起，將 Stormy Mule 的分銷範圍拓展到新的地區，並與通路合作夥伴一起拓展到新的地區。

Moving on to Virgil's. Our sales were up more than 20% on both a year-over-year and quarter-over-quarter basis, in large part due to the launch of our new Zero Sugar sleek cans that were rolled out in Sprouts in April. SPINS Natural and Enhanced Category scan data reflects a year-to-date increase of 140% and nearly 150% increase during the 4-week period ending at the close of Q2. The Natural and Enhanced Category covers US supermarkets with at least 2 million in annual sales and at least 50% of sales from natural organic products, excluding Whole Foods. We look forward to more shelf space for the rebranded sleek cans with our various channel partners in the coming months that presently include in addition to Sprouts, HEB, Stop & Shop and Ingles among others. We are excited about the new look as we conducted extensive research on positioning and consumer purchasing tab, the success we have had with our Sleek Ginger Ale cans and the initial pull we are experiencing at Sprouts.

再來說說Virgil's。我們的銷售額年成長和季增均超過20%，這很大程度上得益於4月在Sprouts推出的全新零糖光滑罐裝產品。 SPINS天然和增強型產品類別掃描數據顯示，年初至今的銷售額成長了140%，截至第二季末的四周內成長了近150%。天然和增強型產品類別涵蓋年銷售額至少200萬美元且至少50%銷售額來自天然有機產品的美國超市（不包括Whole Foods）。我們期待未來幾個月與各通路合作夥伴（目前包括Sprouts、HEB、Stop & Shop和Ingles等）合作，為更名後的光滑罐裝產品帶來更多貨架空間。我們對新面貌感到非常興奮，因為我們對定位和消費者購買標籤、Sleek Ginger Ale 罐的成功以及 Sprouts 最初受到的關注進行了廣泛的研究。

Subsequent to the quarter, we announced the launch of Virgil's Bavarian Nutmeg Root Beer and our Flying Cauldron Butterscotch Beer and swing-lid bottles and all 667 Cracker Barrel corporate-owned locations which spans across 42 states. These swing-lid bottles are margin accretive to our overall portfolio, so we are thrilled to be serving these beverages year round at Cracker Barrel. In addition to the Cracker Barrel relationship, we have grown our seasonal swing-lid program from 20,000 cases in 2020 to over 200,000 forecasted cases this year. During the second half of the year, we plan to launch a Virgil's variety pack on e-commerce, an additional swing-lid flavor, hot spiced apple cider and our popular Cranberry Ginger Ale just in time for the holidays.

本季結束後，我們宣佈在遍布 42 個州的 667 家 Cracker Barrel 自營門店推出 Virgil's Bavarian Nutmeg Root Beer 和 Flying Cauldron Butterscotch Beer 以及旋蓋瓶裝啤酒。這些旋蓋瓶裝啤酒可以提升我們整體產品組合的利潤率，因此我們很高興能夠在 Cracker Barrel 全年供應這些飲品。除了與 Cracker Barrel 的合作關係外，我們還將季節性旋蓋計畫從 2020 年的 2 萬箱擴大到今年預計的 20 萬箱以上。下半年，我們計劃在電商平台上推出 Virgil's 什錦裝、一款新的旋蓋口味、香辣蘋果酒以及我們備受歡迎的蔓越莓薑汁汽水，恰逢假日。

Returning to our supply chain, as I mentioned earlier, we experienced heightened fuel and transportation costs during the second quarter, which offset our cost-saving initiatives implemented earlier this year. Transportation fuel cost, although our team has done exceptional work to implement lower contracted freight lanes and reduce out-of-network shipments, there was simply no way to avoid the rising fuel cost during the second quarter which we have all seen first-hand at the gas pump this year. On a positive note, we have seen fuel costs come down over the past 2 months, which makes us optimistic that we can get our overall transportation costs back down to lower levels in Q3 and Q4. We have also recently negotiated lower contracted rates for many of our freight lines.

回到我們的供應鏈，正如我之前提到的，第二季度我們的燃油和運輸成本上漲，抵消了我們今年早些時候實施的成本節約措施。在運輸燃油成本方面，儘管我們的團隊在降低合約貨運專線成本和減少網路外運輸方面做出了卓越的努力，但第二季度燃油成本的上漲依然無法避免，這一點我們今年在加油站親眼目睹了。積極的一面是，過去兩個月，燃油成本有所下降，這讓我們對第三季和第四季的整體運輸成本能夠回落到較低水準充滿信心。我們最近也就許多貨運線路協商降低了合約費率。

Further, given the strong order demand we experienced earlier this year, our supply chain is encountering fewer delays and more available line time at co-packers. We made the strategic decision to buildup our inventory of finished goods, so that we can effectively satisfy that demand moving forward. This was also a large (technical difficulty) we were not positioned to fulfill the retail demand in a cost-effective manner. Now that we're a flush with inventory, we can ship more products in Q3 and Q4 without incurring those delivery and handling costs again, which will improve operating margin and enable us to generate positive cash flow over the next 2 quarters.

此外，鑑於今年稍早我們經歷了強勁的訂單需求，我們的供應鏈遭遇的延誤有所減少，代加工廠的生產線可用時間也增加了。我們做出了增加成品庫存的策略決策，以便能夠有效地滿足未來的需求。這也是一個巨大的（技術難題），因為我們無法以經濟高效的方式滿足零售需求。現在我們的庫存充足，我們可以在第三季和第四季出貨更多產品，而無需再次承擔這些運輸和處理成本，這將提高營業利潤率，並使我們能夠在接下來的兩個季度產生正現金流。

Outside of transportation and fuel, we have continued to see benefits of our purchasing efficiencies, ingredient and label optimization, reduced tolling fees in inbound freight, as a result of better economies of scale. However, to meet tight deadlines with our various new product launches, we produced and utilized sleeks and digitally printed cans in our initial production runs, which are more expensive than painted cans and consequently impacted gross margins. That will no longer be repeated as we now have cycled through the majority of that inventory and have an ample supply of lower cost, painted cans and are presently using them. We also use an alternative supplier to supplement our inventory needs during the second quarter, which resulted in higher costs and the incremental delivery charges. We have also cycled through that higher cost inventory, which will result in lower cost of goods through the balance of the year.

除了運輸和燃料之外，由於規模經濟效益的提升，我們繼續受益於採購效率的提高、原料和標籤的優化以及入境貨運的過路費的降低。然而，為了滿足各種新產品發布的緊迫期限，我們在初期生產過程中生產並使用了光滑罐和數位印刷罐，這些罐比噴漆罐更昂貴，因此影響了毛利率。這種情況將不再發生，因為我們現在已經用完了大部分庫存，並且擁有充足的低成本噴漆罐供應，目前正在使用它們。我們還在第二季度使用了其他供應商來補充庫存需求，這導致成本上升和運費增加。我們也已經用完了這些成本較高的庫存，這將降低今年剩餘時間的商品成本。

We are also starting to see better rates with co-packers and various surcharges are being reduced and/or eliminated. Further, the price increase we implemented earlier this year will also take effect in the coming quarter as planned, which will provide an additional sales and market lift going forward.

我們也開始看到代加工廠的費率降低，各種附加費也正在降低或取消。此外，我們今年稍早實施的漲價也將按計劃在下一季生效，這將為未來的銷售和市場帶來額外的提振。

In summary, we continue to face residual turbulence from the supply chain headwinds for the second quarter and really the first half of the year. However, input costs and product availability appear to be normalizing, and we are optimistic that the worst is behind us. Demands for our products remain strong and we are finally stockpiled with enough finished goods to fulfill that demand at a much higher margin. We look forward to delivering on our growth and profitability objectives in the second half of the year, while generating meaningful cash from operations.

總而言之，我們在第二季乃至整個上半年仍將面臨供應鏈逆風帶來的持續動盪。然而，投入成本和產品供應似乎正在恢復正常，我們樂觀地認為最糟糕的時期已經過去。我們產品的需求依然強勁，我們終於儲備了足夠的成品，能夠以更高的利潤率滿足這項需求。我們期待在下半年實現成長和獲利目標，同時從營運中獲得可觀的現金。

With that, I'll pass the call to Tom, to walk through our financial results before returning for closing remarks.

說完這些，我將把電話轉給湯姆，讓他介紹我們的財務業績，然後再回來做結束語。

Thanks, Norman. Turning to our results, all variances referenced are on a year-over-year basis unless otherwise noted.

謝謝，諾曼。說到我們的業績，除非另有說明，所有引用的差異均為同比變化。

Net revenue for Q2 increased 22% to $13.7 million, compared to $11.3 million in the year ago quarter. That double-digit increase was due to strong demand across our Reed's branded products, more specifically, Reed's Ginger Beer, Reed's Ginger Ale, Reed's Classic Mule, as well as our Virgil's Zero Sugar line.

第二季淨收入成長22%，達到1,370萬美元，去年同期為1,130萬美元。這一兩位數成長得益於Reed's品牌產品的強勁需求，具體包括Reed's薑汁啤酒、Reed's薑汁汽水、Reed's經典騾子以及Virgil's零糖系列。

Gross profit during the second quarter of 2022 remained flat at $3.3 million. Gross margin was 24% compared to 29% in the second quarter of 2021. As Norm mentioned, our second quarter margin was impacted by higher costs related to one-time material sourcing and production. When excluding these one-time costs, Q2 gross margins would have been approximately 32% for the quarter.

2022年第二季毛利持平於330萬美元。毛利率為24%，而2021年第二季為29%。正如Norm所述，我們第二季的利潤率受到一次性材料採購和生產相關成本上升的影響。若剔除這些一次性成本，第二季的毛利率約為32%。

Delivery and handling fees in Q2 were $3.8 million compared to $2.5 million in the year ago period, driven by higher volume, freight rates, and fuel costs and increased finished goods production. Delivery and handling expenses were approximately 28% of net sales or $5 per case compared to 22% of net sales or $3.53 per case in the second quarter last year. As Norm mentioned, the second quarter included additional expenses to building up inventory and extra $325,000 or $0.45 per case. Since these costs were recognized in Q2, we will save on delivery and handling in the back half of the year.

第二季的配送和處理費用為380萬美元，而去年同期為250萬美元，主要得益於銷售量、運費和燃油成本的增加以及成品產量的增加。配送和處理費用約佔淨銷售額的28%，即每箱5美元，而去年第二季該費用佔淨銷售額的22%，即每箱3.53美元。正如Norm所提到的，第二季包含了用於增加庫存的額外費用以及32.5萬美元的額外費用，即每箱0.45美元。由於這些成本已在第二季確認，我們將在下半年節省配送和處理費用。

Outside of delivery and handling, the rest of our operating costs were managed very well. Selling and marketing costs were reduced by 16% to $2.2 million compared to $2.6 million in the second quarter of 2021. As a percentage of revenue, selling and marketing costs were 16% compared to 23% in the year ago period. Our general and administrative expenses during the second quarter were also slightly lower at $1.8 million compared to the prior year. Total operating expenses were $7.8 million or 57% of net sales compared to $7 million or 62% of net sales in the year ago quarter. Operating costs, excluding freight, were $4 million, which is approximately $0.5 million lower than prior year. Operating loss during the quarter was $4.5 million or $0.04 per share compared to $3.7 million or $0.04 per share. And modified EBITDA in Q2 was $4.4 million compared to $3.1 million in the year ago quarter.

除配送及處理成本外，其餘營運成本均可有效管理。銷售和行銷成本下降 16%，為 220 萬美元，而 2021 年第二季為 260 萬美元。佔收入的百分比為 16%，而去年同期為 23%。第二季的一般及行政開支也略低於 180 萬美元。總營運開支為 780 萬美元，佔淨銷售額的 57%，而去年同期為 700 萬美元，佔淨銷售額的 62%。不包括運費的營運成本為 400 萬美元，比去年減少約 50 萬美元。本季營運虧損為 450 萬美元，即每股 0.04 美元，去年同期為 370 萬美元，即每股 0.04 美元。第二季調整後 EBITDA 為 440 萬美元，去年同期為 310 萬美元。

Turning to our balance sheet and liquidity. Cash used in operating activities was approximately $14.1 million for the second quarter of 2022 compared to $5.3 million for the same period in 2021. As of June 30th, we had approximately $280,000 of cash and $969,000 worth of current availability. The total facility has a borrowing capacity of $13 million with $11.5 million outstanding on June 30th. You may recall from our Q1 conference call that we closed a private placement of convertible notes that resulted in approximately $10 million of net proceeds. Nearly all of these proceeds were used to pay down our revolver, which we drew down against to help us stockpile the inventory as previously discussed. With ample finished goods in place, we expect to generate meaningful cash flow over the next 2 quarters and strengthen our cash position once again.

談到我們的資產負債表和流動性。 2022年第二季度，經營活動現金使用量約1,410萬美元，而2021年同期為530萬美元。截至6月30日，我們擁有約28萬美元現金和96.9萬美元的可用現金。截至6月30日，我們的總借貸額度為1,300萬美元，其中未償還金額為1,150萬美元。您可能還記得，在我們的第一季電話會議上，我們完成了可轉換債券的私募，獲得了約1000萬美元的淨收益。幾乎所有這些收益都用於償還我們的循環信貸，正如之前討論的那樣，我們動用了這些循環信貸來幫助我們囤積庫存。由於成品庫存充足，我們預計未來兩季將產生可觀的現金流，並再次增強我們的現金狀況。

Looking to our guidance for 2022, we continue to expect net sales to range between approximately 59 and $62 million, reflecting growth of approximately 20% to 25% from 2021. We also continue to expect gross margin for 2022 to be approximately 30% compared to 27.4% in 2021. And finally, we expect modified EBITDA to improve in 2022 as a result of our revenue growth, margin expansion and cost savings initiatives.

展望 2022 年的預期，我們繼續預期淨銷售額將在約 5,900 萬至 6,200 萬美元之間，較 2021 年增長約 20% 至 25%。我們也繼續預期 2022 年的毛利率約為 30%，而 2021 年為 27.4%。最後，由於我們的營收成長、利潤率擴大和成本節約舉措，我們預計 2022 年的調整後 EBITDA 將會改善。

I will now turn the call back to Norm for closing remarks.

現在我將把電話轉回給諾姆，請他作結束語。

Thanks, Tom. During the first half of the year, we continue to face unprecedented inflation and supply chain bottlenecks. Despite these challenges, we continue to drive top line growth, implement a price increase, hold the line on promotional costs and reduce non-transportation-related operating costs.

謝謝，湯姆。今年上半年，我們持續面臨前所未有的通貨膨脹和供應鏈瓶頸。儘管面臨這些挑戰，我們仍持續推動營收成長，實施價格上漲，控制促銷成本，並降低與運輸無關的營運成本。

Looking ahead, we have several key initiatives on track to hit our growth and profitability targets, including the nationwide launch of our swing-lid bottles at Cracker Barrel, continued growth of our overall swing-lid program, ramping up of our newly released RTD alcohol products, our relaunch of Virgil's Zero Sugar portfolio, and the continued growth of our flagship Reed's Ginger Beer and Virgil's Root Beer. We anticipate meaningful gross margin growth and lower transportation costs, both areas that significantly impacted our results during the first half of the year. Additionally, we will deplete a significant amount of finished goods inventory on our balance sheet, convert (inaudible) cash. We remain steadfast with our continued cost-saving initiatives and look forward to delivering on our goals in 2022.

展望未來，我們正按計劃推進多項關鍵舉措，以實現成長和盈利目標，包括在Cracker Barrel全國範圍內推出我們的旋蓋瓶裝產品、持續拓展我們整體的旋蓋項目、加大新推出的即飲酒產品線、重新推出Virgil's零糖產品組合，以及持續提升我們旗艦產品Reed's薑汁啤酒和Virgils。我們預計毛利率將大幅成長，運輸成本也將下降，這兩方面都對我們上半年的業績產生了重大影響。此外，我們將清理資產負債表中的大量成品庫存，並將（聽不清楚）現金轉換為現金。我們將繼續堅定不移地實施成本節約舉措，並期待在2022年實現目標。

Operator, we will now open the call for Q&A.

接線員，我們現在開始問答環節。

Thank you. We will now begin the question-and-answer session. (Operator Instructions) Our first question comes from Sean McGowan with ROTH Capital Partners. Please go ahead.

謝謝。現在開始問答環節。 （操作員指示）第一個問題來自羅仕證券的肖恩·麥高恩 (Sean McGowan)。請提問。

Okay. I want to get a little bit more color on the inventory, because I just thought that this would be the quarter where we might see that come down. How much of the inventory is in not only finished goods, but like new products that wouldn't have even been there last year, like some of these new product launches that you got in just at the end of the quarter, how much inventory is that? And kind of more specifically, should we expect it to be down at the end of Q3?

好的。我想更詳細地講一下庫存狀況，因為我覺得這個季度庫存可能會下降。庫存中不僅包括成品，還包括去年還沒有上市的新產品，例如本季末推出的一些新產品，庫存量是多少？更具體地說，我們是否應該預期庫存量在第三季末會下降？

Well, I'm going to answer those questions in reverse order, Sean. Yes, we expect it to be down. And for our new products, the bulk is really going to be in Virgil's sleek cans for the rebranded Zero Sugar. The Hard Ginger Ale is minimal. The Mule is -- the procurement of raw materials is really by our co-packers, so we don't really hold any non-finished good inventory that we purchased. But the bulk was really Virgil's Zero Sugar, as I said. And what really I think created the growth in inventory was, as you recall, during the year, beginning of the year, [Paul] instituted a minimum 5 truckload per SKU order requirement. And we look closely at our forecast and believe that, we could cycle through those cans.

好吧，肖恩，我倒著回答這些問題。是的，我們預計庫存會下降。至於我們的新產品，大部分庫存實際上會放在維吉爾重新命名的零糖系列的光滑罐裝中。硬薑汁汽水的庫存很少。騾子系列的原料實際上是由我們的代加工商採購的，所以我們實際上沒有購買任何未完成的庫存。但正如我所說，大部分庫存實際上是維吉爾零糖系列。我認為庫存成長的真正原因是，正如你記得的那樣，在年初，[保羅]制定了每個SKU訂單至少需要5卡車的量。我們仔細研究了我們的預測，並相信這些罐裝產品可以循環使用。

However, we had to make a commitment early on or we wouldn't -- we risk losing those cans. So the big commitment and the jump on non-finished good inventory is going to be primarily due to the Virgil's Zero Sugar. But obviously, we're producing finished goods, so we're using it up and then we're selling off finished goods. So across the board, we'll see both finished goods and non-finished good inventory come down in both the third and fourth quarter.

然而，我們必須儘早做出承諾，否則我們不會——我們冒著失去這些罐頭的風險。因此，龐大的投入和未完成品庫存的激增將主要歸因於Virgil's零糖。但顯然，我們正在生產成品，所以我們會用完它，然後我們會出售成品。因此，總體而言，我們將看到第三季和第四季成品和非成品庫存都會下降。

Okay. Well, I'm glad you brought up Paul, because I think it was last week, they said, they were seeing some slackening demand and they were closing a couple of plants, and commenting on how maybe some pricing action taken by some customers was leading to lower demand. Have you seen any indication from them that they might kind of ease up on either the higher prices or on this minimum quantity commitment?

好的。很高興你提到保羅，因為我記得上週他們說，他們看到需求放緩，所以關閉了幾家工廠，並評論說可能是一些客戶採取的定價措施導致了需求下降。你有沒有看到他們有任何跡象表明，他們可能會放鬆漲價或最低數量承諾？

Well, I've heard the minimum quality commitment is coming down now. So that's something that, obviously, we want to take advantage in the future. And I am hearing rumblings across the board about can prices coming down as well, waiting to see that. I think (inaudible) taken some pricing down. I think Paul has been talking about it. We also buy cans from Crown and we've had conversations there. So both pricing and minimum quantities, the demand that everybody forecasted, obviously didn't come to fruition. Now, I can't comment on why Paul is closing facilities. But obviously, the demand has not panned out as everyone has expected. And like I'm seeing across the board, we're feeling much better about our overall supply chain and our ability to get items and then not that I want to jinx myself, but I haven't had a price increase on any components in a while. And it seems like they were popping up every week. So it does seem like things appear to be normalizing a bit. Now the good news is, we've kind of hedged ourselves against inflation, because we do have so much inventory. So we feel good from that perspective.

嗯，我聽說最低品質承諾現在正在下調。所以，顯然，我們希望在未來利用這一點。我也聽到大家紛紛抱怨罐裝價格也在下降，我們拭目以待。我認為（聽不清楚）已經下調了一些價格。我想保羅一直在談論這個問題。我們也從皇冠公司購買罐裝產品，我們也在那裡進行溝通。所以，無論是價格還是最低訂購量，也就是大家預測的需求，顯然都沒有實現。現在，我無法評論保羅為什麼要關閉工廠。但顯然，需求並沒有像大家預期的那樣成長。正如我所看到的，我們對整體供應鏈和採購能力感覺好多了。我不是想給自己找麻煩，只是我已經有一段時間沒有遇到任何零件漲價的情況了。而且好像每週都會漲價。所以，情況確實似乎逐漸恢復正常。現在的好消息是，由於庫存充足，我們在某種程度上已經對沖了通膨風險。所以從這個角度來看，我們感覺良好。

Okay. I'm glad that's a good segue into my next question. When you put the price increases into place and/or at least announced them and thinking about them, you must have had some expectations about where you would see costs over the course of the balance of the year and it sounds like in some cases, maybe they're higher. But based on more recently, do you think that the price increases that you can count on, a, can you count on them, and, b, will they kind of match up with what your expectations were vis-a-vis cost increases?

好的。很高興這能很好地引出我的下一個問題。當您實施漲價措施，或至少宣布漲價並進行思考時，您一定對今年剩餘時間的成本走勢有所預期，而且在某些情況下，成本可能會更高。但根據最近的情況，您認為您可以預期的漲價幅度是：a，您能預期嗎？ b，這些漲價幅度是否能達到您對成本上漲的預期？

You mean from us purchasing raw materials and ingredients?

您的意思是向我們購買原料和配料嗎？

Yes. I mean, you're kind of guessing at the point you put in a price increase or announce it, how much is going to cover those cost increases. How has that played out versus your expectations?

是的。我的意思是，你在提價或宣布提價時，會猜測需要多少錢才能彌補成本上漲。這與你的預期相比如何？

I think it played out as we thought. But I don't have a crystal ball, and I don't know what's going to happen down the road. I know that we -- look, we're continuing to look to take out cost and we never stopped because you can't stop and you don't know what the future is going to bring, but one of the things that we're looking forward to next year is, we've developed with one of our suppliers some new technology to bring down cost of our Ginger, for example. So that's an area where we continually seek without sacrificing quality, the ability to bring costs down.

我認為事情正如我們想像的那樣發展。但我沒有水晶球，也不知道未來會發生什麼事。我知道我們——你看，我們一直在努力降低成本，我們從未停止，因為你不能停下來，你也不知道未來會發生什麼。但我們明年期待的事情之一是，我們與一家供應商合作開發了一些新技術，例如，可以降低生薑的成本。所以，在不犧牲品質的情況下，我們一直在努力降低成本。

So look, we trying to do both things. One was continuing look to bring costs down to build in where we thought costs were going to be when we took our pricing, right? And it seems like we were there in certain circumstances. And actually, other things have subsided. So that's a benefit to us. But look, I don't -- like I said, I don't have a crystal ball and there's many geopolitical issues out there that have impacted the whole world, not just Reed's, but us as individuals. And I'm not going to give an attempt to try to predict that or quantify what's going to happen. I'm hoping for the best, and we continue to look to improve things the best we can.

所以，你看，我們正在努力兩頭兼顧。一是持續降低成本，將成本控制在我們制定定價時的預期水平，對吧？在某些情況下，我們似乎已經達到了這個水平。實際上，其他因素已經消退。所以這對我們有利。但是，就像我說的，我沒有水晶球，而且有很多地緣政治問題影響著整個世界，不只是里德，也影響著我們每個人。我不會試圖預測或量化會發生什麼。我希望一切順利，我們會繼續盡最大努力改進。

Okay. That's helpful. And then the last question I had was, I think the math works out that you would see significantly higher gross margins in the second half, of course, reiterating that guidance. Are we going to see that in the third quarter or do we have to wait until the fourth quarter to see a big increase from the comparative gross margin?

好的，這很有幫助。我的最後一個問題是，我認為計算結果表明，下半年的毛利率會顯著提高，當然，我重申了先前的預期。我們會在第三季看到這一點，還是要等到第四季才能看到相對毛利率的大幅成長？

You'll see it in both quarters.

您會在兩個季度中看到它。

Okay. And do you think you can get back to where you were like 2 years ago, or could it even be higher?

好的。您認為您的業績能回到兩年前的水準嗎？或是能更高嗎？

It's going to be higher. It has to be higher.

它會更高，也必須更高。

Than 2 years ago?

比兩年前還多嗎？

Yes. Remember, we were in the low-30s, and we need to exceed that. Like I said, that's why I made that reference earlier about working with partners on new technology to bring costs down. And that's going to be -- for us, the highest priced products we have are Ginger line and to be able to work on that to bring a pretty significant cost on like that is going to really pay off. And like I said, we're looking at everything that we can do and we never stop and we never give up, looking for opportunities to bring costs back in line.

是的。記住，我們的成本在30多美元出頭，我們需要超越這個數字。就像我說的，這就是我之前提到與合作夥伴合作開發新技術以降低成本的原因。對我們來說，價格最高的產品是Ginger系列，能夠致力於降低相當可觀的成本，這將會非常值得。就像我說的，我們正在研究一切可以做的事情，我們永不停歇，永不放棄，尋找將成本控制在合理範圍內的機會。

Okay, great. Thanks a lot.

好的，太好了。非常感謝。

The goal is to be at 40%. I mean that's really what we're working towards. So, we're not going to stop in the low-30s or mid-30s but continue to drive that number.

我們的目標是達到40%。我的意思是，這正是我們努力的方向。所以，我們不會止步於30%出頭或35%左右，而是會繼續努力提高這個數字。

The next question comes from Anthony Vendetti with Maxim Group. Please go ahead.

下一個問題來自 Maxim 集團的 Anthony Vendetti。請提問。

Yes, I guess first on the revenue line, and then I have a question on the cost to deliver per case. So on revenues, obviously, your core brands drive the bulk of your revenues. Out of some of the new products you've announced, which ones do you think either for the rest of this year, or as we move into 2023, which ones do you believe will be able to contribute the most in terms of absolute dollars to the top line?

是的，我想先談談收入，然後我想問每箱產品的配送成本。所以，就收入而言，顯然你們的核心品牌貢獻了大部分收入。在你們發布的一些新產品中，你們認為在今年剩餘時間內，或是在進入2023年後，哪些產品能夠為公司帶來最大的收入貢獻？

Well, Ginger Beer, obviously, continues to grow and is really working it up to the top of the heap. So I think that's going to be a big piece. I'm really optimistic on the hardline as well. The profit and the dollar per case in terms of revenue is higher, and the velocities are also higher. Look, we are truly trying to establish this thing and go a mile deep and an inch wide as opposed to saying that and going a mile wide and an inch deep, and really focus on some key areas to drive velocity, gain market understanding. And initially, what we're seeing has been really positive. So that's the approach we're going to take. I believe those are going to be big contributors in the latter half of this year, but more importantly, in 2023.

薑汁啤酒顯然持續成長，並且正在努力躋身頂級行列。所以我認為這將是一個重要的組成部分。我對強效啤酒也非常樂觀。它的利潤和每箱單價更高，銷售速度也更快。你看，我們真的在努力建立這個品牌，深入淺出，而不是空談，真正專注於一些關鍵領域來提高銷售速度，加深對市場的了解。目前，我們看到的情況非常積極。這就是我們要採取的方法。我相信這些將在今年下半年，更重要的是，在2023年，成為重要的貢獻者。

And our Swing-lid program that I've mentioned, in 3 years, it's grown 10 times. And those are high margin products that continue to contribute. When I saw -- just to give you a little back story how that came back, there were so many consumer inquiries like, where did this go? I can't get it. It was my favorite. And I'll tell you, the best part about it is we're sold out before we're done making it, right? So that's a big contributor. That's always second half of the year. I mean, though there will be some contribution from Cracker Barrel because it's going to be a full year program, but the bulk of it is second half. We also have success with our Cranberry Ginger Ale around the holidays. So that's obviously part of the Ginger Ale category. But we're waiting for the relaunch Virgil's Zero Sugar also kick in to high gear as well.

我之前提到的Swing-lid項目，在三年內成長了10倍。這些高利潤產品持續為公司貢獻利潤。我先簡單介紹一下Swing-lid專案恢復營運的背景，當時有很多消費者詢問，例如：這個去哪了？我買不到了。它是我最愛的。而且，最棒的是，還沒生產完就賣光了，對吧？所以Swing-lid是一個很大的貢獻者。而且通常都是下半年。雖然Cracker Barrel也會有一些貢獻，因為這是一個全年的項目，但主要貢獻還是在下半年。我們的蔓越莓薑汁汽水在假日期間也賣得很好。這顯然是薑汁汽水類別的一部分。不過，我們正在等待重新上市的Virgil's Zero Sugar也能迅速走紅。

So I mean I think there's 3 or 4 platforms to Ginger Ale Hard, our Swing-lid and then our Virgil's Zero Sugar, and ironically, our flagship brands keep growing, our Root Beer and our Ginger Beer. Our Ginger Beer we put into cans, both the extra and the zero extra and cans have become a very popular package and are growing strongly. So those are the 4 pillars that -- and I think you're going to continue to see growth. They're in big categories that are growing and one of the things that I really like is that Reed's has strong brand recognition. And particularly when we get into categories like Hard Ginger Ale or the MULO or the Classic or the Stormy Mule, things are synonymous with our name and what we represent.

所以我認為硬薑汁汽水有三、四個平台：我們的旋轉蓋薑汁汽水和 Virgil's 零糖薑汁汽水。諷刺的是，我們的旗艦品牌——根汁汽水和薑汁汽水——卻持續成長。我們的薑汁汽水採用罐裝，無論是特濃薑汁汽水還是零糖特濃薑汁汽水，罐裝包裝都非常受歡迎，而且增長強勁。所以，這四大支柱——我認為你會看到持續成長。它們屬於正在成長的大型品類，而我真正喜歡的一點是，Reed's 擁有強大的品牌認知。尤其是在硬薑汁汽水、MULO、經典薑汁汽水或 Stormy Mule 等品類中，它們與我們的名字以及我們所代表的品牌息息相關。

So there's not like a whole new consumer education. People are using our Ginger Beer to make their Dark N' Stormy to make their mule. I know I did. So now I have the option of taking them in a ready-to-drink format. But I think those are the pillars that you'll see. The other thing too is, and I should have incorporated this into my remarks, but I wait for the question, Reed's (inaudible) outpacing the growth that we're seeing in the CSD category. Virgil's will catch-up as a result of both the Swing-Lid program, but also as we get to Virgil's Zero Sugar out more. So we have 3 brand portfolios that are hitting on all cylinders. But the 4 pillars that I talked about, I think you'll see a really strong growth into the future.

所以，這不像是一種全新的消費者教育。人們用我們的薑汁啤酒來製作他們的Dark N' Stormy，再來製作他們的騾子。我知道我就是這樣做的。所以現在我可以選擇以即飲形式推出它們。但我認為這些都是你們會看到的支柱。還有一件事，我應該在我的發言中提到這一點，但我還在等你提問，Reed's（聽不清楚）的成長速度超過了我們在碳酸軟性飲料類別中看到的。 Virgil's將會迎頭趕上，這既得益於Swing-Lid計劃，也得益於我們推出的Virgil's Zero Sugar。所以我們有3個品牌組合，它們都在全力以赴。但我提到的4個支柱，我認為你們未來會看到非常強勁的成長。

Okay, great. And then the last question has to do with costs. Obviously, inflation is big across ingredients and shipping, handling, transportation. I was a little bit stunned by how much it was per case, up over 40%. Last year, it was $3.53 per case to deliver, now it's $5 a case. Hopefully, that's the high watermark. I think you did mention that, that should start to go down. Where do you think that could normalize at and how soon do you think that will start to go down?

好的，太好了。最後一個問題與成本有關。顯然，原料、運輸、搬運等環節的通貨膨脹率很高。每箱的價格上漲了40%以上，這讓我有點震驚。去年，每箱運費是3.53美元，現在是每箱5美元。希望這是最高價。我想您確實提到過，價格應該會開始下降。您認為什麼時候才能恢復正常？多久之後才能開始下降？

Well, as we said earlier, that $5 is really artificially high because there's at least $0.45 in what I'll call prepaid freight because as you build -- generally, we're making it, we're shipping it to our distribution center, shipping it out to our customers. So it kind of flows through with the current period because we've built up inventory, we shipped a lot into our distribution centers. So I went almost -- in my mind, I call that prepaid freight. So we're really at $4.55 a case to $5. Yes, I think it's the high watermark. We're seeing rates come down. We just recently renegotiated contracted rates and expect to see a pretty big savings there. Plus, as I talked about last quarter, we're in the process of restructuring our distribution centers to eliminate a lot of that transfer of freight, which is what we need to do.

嗯，正如我們之前所說，5美元的價格實際上是人為抬高的，因為至少有0.45美元，我稱之為預付運費，因為通常情況下，我們會在生產過程中，將其運送到配送中心，再運送給客戶。所以這部分費用會隨著當前情況而流動，因為我們已經累積了庫存，並且已經將大量貨物運送到配送中心。所以我幾乎——在我看來，我稱之為預付運費。所以，我們實際上的價格是每箱4.55美元到5美元。是的，我認為這是最高價。我們看到運費正在下降。我們最近剛重新協商了合約費率，預計會節省不少成本。另外，正如我上個季度提到的，我們正在重組配送中心，以減少大量的貨物轉運，這正是我們需要做的。

So I think both -- obviously, there's things that are not in our control, petroleum prices go back through the roof. I mean, look, we're all seeing it now when we go to the gas station that we're paying less for gas, and we're seeing the same thing. It seems like because volumes are down across the board and a lot of goods. There are more trucks available and it's the old supply versus demand. So we're seeing organically the fuel prices coming down and supply and demand also forcing pricing naturally down and then we're going to get better in terms of where our mix of cans or bottles is increasing. So payloads are getting bigger.

所以我認為兩者都有——顯然，有些事情是我們無法控制的，例如油價再次飆升。我的意思是，你看，我們現在去加油站的時候都看到油價下降了，我們看到的是同樣的情況。這似乎是因為油量全面下降，很多商品也下降了。可用的卡車更多了，這是老生常談的供需關係。所以我們自然而然地看到油價下降，供需關係也迫使價格自然下降，然後我們的罐裝和瓶裝貨物組合就會增加，情況也會好轉。所以，有效載荷也越來越大。

We do have inventory where we need it. So we're not shipping out of network. So we're being more efficient. We're going to restructure those distribution centers in the second half of the year, so we'll take a lot of savings out of that. So it's just not relying on market forces, we want to take advantage of that. But we're doing a lot more behind the scenes to really drive those costs down and I do hope that this is the high watermark. I mean, I'm seeing in the last 2 months that it's definitely moving in the right direction and that we will continue to see it head downwards.

我們確實在需要的地方有庫存。所以我們不會從配送網路外出貨。這樣一來，我們的效率就更高了。我們將在下半年重組這些配送中心，這將節省大量成本。所以，我們不是依賴市場力量，而是想利用這一點。我們正在幕後做更多工作，以真正降低成本，我希望這是最高水準。我的意思是，在過去兩個月裡，我看到成本確實朝著正確的方向發展，而且我們將繼續看到它下降。

Our next question comes from Wally Jamal, private investor.

我們的下一個問題來自私人投資者沃利·賈馬爾 (Wally Jamal)。

Just have 3 questions for you. One is about the Virgil's Zero Sugar sleek cans. Do you feel or is there an opportunity coming up for C-stores offered as one-offs to customers? Do we have the ability to ship the 24 or 36 can cases to C-stores or are we working on something like that?

我只想問您三個問題。一個是關於 Virgil's Zero Sugar 光滑罐裝飲料的。您是否覺得便利商店有機會以一次性的方式向顧客提供這種飲料？我們有能力將 24 罐或 36 罐裝的包裝箱運送到便利商店嗎？或者我們正在研究類似的方案？

Yes and yes. There seems to be some interest in the C cans and yes, we can do that. In fact, I would welcome that because that's a much cheaper package than what we presently have. But yes, we can satisfy C-stores with those cans.

是的，是的。似乎有人對C罐裝飲料感興趣，是的，我們可以這麼做。事實上，我對此表示歡迎，因為這個包裝比我們目前的包裝便宜得多。不過，是的，這些罐裝飲料確實可以滿足C類商店的需求。

Especially though the lemon lime and the Grapefruit, I feel like it's far superior part with the sparkling flavored water is offering right now, I felt we have opportunity to capture sales there. Also, do you know if any of large grocery stores are asking for end caps or have they asked for end caps Virgil's Zero Sugar slim can to offer in the one-off offerings?

尤其是檸檬青檸和柚子口味，我覺得它們比現在的氣泡水好得多，我覺得我們有機會在這個領域搶佔銷量。另外，你知道有沒有大型超市要求提供瓶蓋，或者他們有沒有要求在一次性供應的Virgil's Zero Sugar細罐裝飲料中加入瓶蓋？

You mean single serve. I think you're going to find that mostly in coolers, where you'll find single serve. Yes. And we're working on that several retailers to not just -- it's not really an end cap, it's to get into the single-serve cooler and we're working on getting that done as well, yes, because obviously, that's a great sampling opportunity and a great way to expand your presence in retail locations.

您的意思是單杯裝啤酒。我想您主要會在冷藏櫃裡找到單杯裝啤酒。是的。我們正在與幾家零售商合作，不僅僅是——這實際上不是終點站，而是進入單杯冷藏櫃，我們也在努力做到這一點，是的，因為顯然，這是一個很好的品嚐機會，也是擴大您在零售店影響力的好方法。

And second question is regards to the Reed's Hard launch. Of that guidance for the year, of the $59 million to $65 million, has any Reed's Hard Ginger baked into those numbers?

第二個問題是關於Reed's Hard的發布。今年的銷售目標中，5,900萬到6,500萬美元，Reed's Hard Ginger的銷售收入有沒有被計入其中？

Very little.

非常少。

Very low. If you have to approximate there, what would you put that at?

非常低。如果必須給出一個大概的數字，你會把它定在多少呢？

It's single-digit percent. I mean it's not enough to make a difference, and that's why we're optimistic about its contribution going forward. When you come out with a new product, you never really know until you get it out and you get it done. So we didn't really put a lot of that into our numbers.

百分比只有個位數。我的意思是，這不足以帶來改變，這就是為什麼我們對它未來的貢獻持樂觀態度。當你推出一款新產品時，你只有在它推出並投入使用後才會真正知道效果。所以我們並沒有在數據中過度考慮這一點。

Okay. And my third question is, we haven't seen any type of changes or updates in regarding to the NASDAQ listing compliance date. Can you provide some insights to what's happening regarding that date?

好的。我的第三個問題是，我們還沒有看到關於納斯達克上市合規日期的任何變更或更新。您能否提供一些關於該日期的最新消息？

We are in the process of organizing a shareholder meeting, and we'll provide updates and information at that point.

我們正在組織股東大會，屆時我們將提供最新進展和資訊。

I see. Have you heard that from the NASDAQ regarding compliance date.

我明白了。你從納斯達克聽說過關於合規日期的消息嗎？

No.

不。

Our next question comes from [Jack Haier, retail.]

我們的下一個問題來自[傑克·海爾，零售業]。

A question for you about the cash flow. So going cash flow positive in Q3 and Q4, is that going to be something that we can expect to stick around thereafter or is it just anticipated for these upcoming 2 quarters?

關於現金流，我想問您一個問題。那麼，第三季和第四季的現金流為正值，我們能預期這種情況會持續下去嗎？還是說這只是對未來兩季的預期？

Well, obviously, we've been talking about hitting cash flow positive in 2023. So we don't really provide guidance on cash flow. But I'll say this, this is really driven by the fact that we don't have to spend a lot of money on inventory in COGS. So I'm using this term prepaid again, kind of, like we've already paid for it. So as it flows through, we don't have to produce and buy those goods. But I'll just go back to what we've been talking about in our plan is to get to cash flow positive in 2023.

嗯，顯然，我們一直在談論在2023年實現現金流正向成長。所以我們其實並沒有提供現金流方面的指導。但我要說的是，這實際上是因為我們不需要在銷貨成本（COGS）中投入大量資金在庫存上。所以我再次使用了「預付」這個詞，有點像我們已經付過錢了。所以，當現金流到帳時，我們不需要生產和購買這些商品。但我還是回到我們之前在計畫中討論的內容，也就是2023年實現現金流正向成長。

Sure. And then along the lines of having all of that prepaid inventory, you've got a couple of hundred k of cash on hand. You guys aren't foreseeing like any need for surplus cash like within the next 2 quarters. We have enough to get in terms of inventory to get us throughout the rest of the year?

當然。考慮到所有這些預付庫存，你們手頭上還有幾十萬現金。你們預計未來兩個季度不會有任何現金需求。我們的庫存足以維持今年剩餘時間的運作嗎？

I'm sorry, could you repeat that?

抱歉，您能再說一次嗎？

So in terms of cash itself, like the couple of hundred K we have on hand, that in sort of concert with the prepaid inventory that we've already got, like we're kind of set for the next 2 quarters.

因此，就現金本身而言，例如我們手頭上有幾十萬現金，與我們已有的預付庫存相結合，我們已經為接下來的兩個季度做好了準備。

Yes.

是的。

Okay. And then last thing, one-off. And I'm sure that there will be more sort of coming down the road in terms of the NASDAQ stuff. But just for maybe uninitiated on the call, we have had 2 extensions like issued via NASDAQ at this point. Is that correct?

好的。最後一件事，一次性的。我相信以後還會有更多關於納斯達克的事情。不過，對於可能還不熟悉電話會議的人來說，我們目前已經透過納斯達克發布了兩次延期。對嗎？

Yes, correct.

是的，正確。

And so like with the upcoming date, do you guys know -- I'm not asking you to say not necessarily what will happen, but in terms of the options, can you go back to NASDAQ and ask for a hearing. I've kind of looked at their website and try to do some reading about it. I think we're a little bit of an interesting sort of case given how many companies are growing 20% year-over-year and having sort of share price issues that we are, but in terms of like what your options are with NASDAQ, let's ignore the reverse stock split, let's ignore delisting, like what are the options with actually interacting with NASDAQ itself?

那麼，關於即將到來的日期，你們知道嗎——我不是要你們說不一定會發生什麼，但就選擇權而言，你們能不能回到納斯達克，要求舉行聽證會？我瀏覽了他們的網站，也試著讀了一些相關資料。考慮到很多公司年增率都在20%，也像我們一樣面臨股價問題，我覺得我們的情況有點意思。但就你們在納斯達克的選擇而言，我們先不考慮反向股票分割和退市，如果真的與納斯達克互動，你們有什麼選擇呢？

We're working with our corporate counsel and NASDAQ. And I think you illuminated on one of the options. So we're going to explore and be as proactive as possible working with our counsel with them to -- because I think you make a great point to be proactive in managing this.

我們正在與公司法律顧問和納斯達克合作。我認為您已經闡明了其中一個選項。因此，我們將探索並盡可能積極主動地與我們的律師合作——因為我認為您提出的積極主動地處理此事的觀點非常正確。

I mean just look for more information as it becomes available, not going to press you guys too much for it other than, I guess, to say don't be afraid to tell the boys over (inaudible) if any delisting notices come our way, they get lost in the mail. But I appreciate all your hard work. I know you do a great job and…

我的意思是，只要有更多信息，就去尋找，我不會給你們太多壓力，只是想說，如果有任何下架通知，別害怕告訴那邊的伙伴們（聽不清），它們會在郵件裡丟失。但我感謝你們所有的辛勤工作。我知道你們做得很好，而且…

Thanks, Jack. No, we're going to do everything we can do to do what's best for the company and our shareholders, and work through our legal counsel with NASDAQ to try to get the best outcome possible. And I'm with you. I'm very subjective on this. And I agree with the comments that you made, but we're not sitting idly and waiting for that loss fail to show up. We are being proactive. And again, that's why we're going to work, we're organizing our shareholder meeting and more information is forthcoming.

謝謝，傑克。不，我們會盡一切努力，為公司和股東爭取最好的結果，並透過我們的法律顧問與納斯達克合作，爭取最好的結果。我同意你的觀點。我對此非常主觀。我同意你的評論，但我們不會袖手旁觀，坐等損失自行消失。我們會積極主動。再說一次，這就是我們要努力的原因，我們正在組織股東大會，更多資訊即將公佈。

Your next question comes from Gary Greenberg, private investor.

您的下一個問題來自私人投資者加里·格林伯格。

I had some questions on the new drink now. How are you going to distribute that? You mentioned it, but are you going to just go into stores? Are you going to try to get a distributor to get into bars or get it into liquor stores or…

我現在對這款新飲料有些疑問。你們打算怎麼分銷它？你提到了，但你們會直接進店販售嗎？你們會試著找經銷商進酒吧，或是進酒類商店，還是…

Are you referring to the alcohol drink?

您指的是酒精飲料嗎？

Yes.

是的。

Yes. So by law, we have to use a 3-tier distribution network. So we have to go through a distributor to go to any retailer. We cannot go directly to any retailer. It has to be a licensed distributor. And we're using both, alcohol and beer distributors to fill that capacity.

是的。根據法律規定，我們必須使用三級分銷網絡。也就是說，我們必須透過經銷商才能將產品銷往任何零售商。我們不能直接聯繫任何零售商。必須是獲得授權的分銷商。為了滿足這項需求，我們同時使用了酒類和啤酒經銷商。

Sounds good. All right. So it wouldn't be like a national distributor, you're more going to go into the states and look for the distributors in those states.

聽起來不錯。好吧。所以它不像全國性的經銷商，你更傾向於去各州尋找分銷商。

Yes. Look, I say this, tongue and cheek, for this great country we live in, we operate like 50 countries when it comes to alcohol.

是的。聽著，我開玩笑地說，我們生活在這個偉大的國家，在酒精問題上，我們的行動相當於50個國家。

Right, I know. They all have their own boards and different regulations. So it's not easy. I had a few questions on the stock. Of course, as a long-term investor, I'm disappointed in the price of it, it's $0.20. And I know that you keep saying in these quarterly meetings that you have -- what you want to do and the way you want to do it. Now you're saying you're going to have a meeting, but what specifics are you going to do to get this stock up? I mean, I'm a firm believer in getting, sometimes getting a fresh start, and that's not to criticize anybody on this currently working, but Reed's in the past has -- and basically that's the reason the stock is down. Wall Street has been disappointed so many times even before you guys got there. Have you looked at changing the name now that you're going into a new line of product away from the soda more and you're going to keep this sort of more an alcohol, maybe possibly a name change to more fit the company, something to really get away from the past failures and a fresh start? That's what I wanted to ask you.

是的，我知道。他們都有自己的董事會和不同的規章制度。所以這並不容易。我對這檔股票有幾個問題。當然，作為一名長期投資者，我對它的價格感到失望，它只有0.20美元。我知道你在季度會議上一直說你想做什麼，以及你想用什麼方式去做。現在你說你要開會，但你打算做什麼具體措施來推動這隻股票上漲？我的意思是，我堅信，有時需要重新開始，這並不是要批評任何正在努力的人，但Reed's過去的做法確實如此——基本上這就是股價下跌的原因。在你們到來之前，華爾街已經失望過很多次了。既然你們現在要進軍一個全新的產品線，不再只做汽水，而是保留這種酒類產品，你們有沒有考慮過改名？或許改名能更貼合公司形象，讓公司真正擺脫過去的失敗，重新出發？這就是我想問你的。

I think you raised some, some good points. We believe we're significantly undervalued. And obviously, the markets have been hit hard. The micro cap markets have hit even harder. If you look at most of our peers, we're all facing a similar thing. I think the only thing we could do is, continue to deliver results that are positive. We will evaluate some of the suggestions that you have mentioned. I can't make any commitments, obviously, but we're very optimistic.

我認為你提出的一些觀點很有道理。我們認為我們的估值被嚴重低估了。顯然，市場受到了重創。微型股市場受到的打擊更大。看看我們大多數的同行，我們都面臨著類似的情況。我認為我們唯一能做的就是繼續取得正面的成果。我們會評估你提到的一些建議。當然，我無法做出任何承諾，但我們非常樂觀。

I mean, look, we believe we're poised to turn the corner. I mean, we're a small company, this economic storm that we just endured, it's like literally driving down the throughway and having a torrential rain storm you can't see in front of you. And you slow down, you turn on your winter wipers on and you get through it. And I think we've come through it and now the sun is out, and we're over focused on cash flow breakeven. And we think we continue to drive top line growth and get the cash flow breakeven, that's the story to tell. And that's really going to be, I think, what really turns us around and that's what we're focused on. We're focused on bringing out transportation, getting margin and continue to drive the top line.

我的意思是，你看，我們相信我們即將渡過難關。我的意思是，我們是一家小公司，剛剛經歷的這場經濟風暴，就像真的在高速公路上行駛，突然遭遇了一場你無法預測前方情況的暴雨。你放慢速度，打開冬季雨刷，就能順利度過難關。我認為我們已經渡過了難關，現在太陽出來了，我們過於專注於現金流的損益平衡。我們認為，我們會繼續推動營收成長，實現現金流的損益平衡，這才是我們要講述的故事。我認為這才是真正讓我們扭轉局面的關鍵，也是我們目前關注的重點。我們專注於拓展運輸業務，提高利潤率，並持續推動營收成長。

And now that a lot of the pain and noise is behind us, we can continue to implement the things that we've been doing over the last 1.5 years. I'm confident that those are going to turn the corner. And as we set our goal is to get to cash flow breakeven in 2023 and despite all the headwinds that we've endured, we're confident we're going to get there. I mean, well, if you look at historically like go back and look at Celsius has gone through way back when they were losing money, and they looked a lot like what we look like today and look where they are today. So I think that's really what we want to do, it's not smoke in mirrors, but it drive the top line and get this profitable.

如今，許多痛苦和喧囂都已過去，我們可以繼續推進過去一年半一直在做的事情。我相信這些事情終將迎來轉機。我們的目標是在2023年實現現金流收支平衡，儘管我們經歷了許多阻力，但我們有信心能夠實現。我的意思是，如果你回顧歷史，你會發現Celsius在虧損時期也經歷過很多次，當時的狀況和我們今天的情況很相似，再看看他們現在的處境。所以我認為這才是我們真正想要做的，這不是虛幻的幻象，而是推動營收成長，最終獲利。

Okay. You have a great product, and that's why I've owned the stock, it's been up and down. I stayed with it and that's why I stayed with it. And now on the -- you said that you're going to have with shareholders meeting, is that going to be the regular meeting in December.

好的。你們的產品很棒，這就是我一直持有這檔股票的原因，它漲跌都一樣。我一直持有，這就是我一直持有的原因。現在──你說你們要召開股東大會，是12月份的例行股東大會嗎？

The annual meeting is getting moved up.

年會正在提前舉行。

Good.

好的。

Which I think everyone will welcome.

我想每個人都會歡迎的。

Yes, it's hard to get interested in meeting in late December. I'm glad you're doing that. That's a good move. All right. You answered all my questions. I appreciate it, and I look forward to following your story and I hope you -- one of the things I always thought that could be done better is to sell the story to the Wall Street crowd investors and I hope you take it on the road and sell your story.

是的，很難讓人對12月底的會議感興趣。我很高興你這麼做。這是一個很好的舉措。好的。你回答了我所有的問題。我很感激，我期待著關注你的故事，我希望你——我一直認為可以做得更好的事情之一就是把這個故事推銷給華爾街的大眾投資者，我希望你能帶著它走上街頭，推銷你的故事。

All right. That's it for questions. I want to thank everybody for participating in today's call. Again, I want to reiterate our confidence for the balance of the year and into 2023, and we appreciate everyone's support, and wish you have a good day.

好的。問題就到這裡。感謝大家參加今天的電話會議。我再次重申，我們對今年餘下時間以及2023年的業績充滿信心，感謝大家的支持，祝大家今天過得愉快。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您可以斷開連線了。