Reed's has posted a marked lift in sales in its full year results for 2007 and expects another increase for the first quarter of 2008. However, gross profits fell in the fullyear as costs in production increased.

The US soft drinks company said today (15 April) that last year was a "transformational year" due to accelerated revenue growth, an expanded distribution network and continued investment in infrastructure.

Net sales for the year ending 31 December increased 25% to US$13.1m with the company attributing its performance to the expansion of its presence within the mainstream marketplace and "continued ability to offer new and innovative products to consumers".

Gross profit for the full year 2007 dipped 1.9% to $2,019,236 or 15.5% of sales, from $2,057,579 or 19.6% of sales for the prior year due to promotion discounting and increased costs of production, the company said.  While operating expenses for the full year 2007 increased 94.3% to $7,508,125 from $3,864,169 for the prior year period.

Reed's founder and CEO Chris Reed said: "Specifically, we entered over 20 key markets in 2007 through new relationships with mainstream distributors, expanding our reach beyond our core natural and specialty retail accounts."

The company outlined that while it continues to benefit from strong consumer demand for its products, it feels it prudent to acknowledge the overall current economic and consumer retail environment in which we operate is soft compared to historical levels.

 "We will evaluate methods to improve our gross margins including outsourcing the production and distribution of our product. Further, we will continue to assess the cost structure of the business to identify areas for improvement," the company added.