Tonight I ate at a small restaurant in Amherst, and had the most delicious bottle of root beer ever. Called Virgil’s, it’s kind of hard to put my finger on what makes it so good. As I read the bottle for clues, I noticed that they were publicly traded. I thought this was strange, given that I’ve never even heard of them.

But indeed, they’re REED on the NASDAQ. And they closed out 2006 with a -21% profit margin and a -124% return on average equity. The “past” quarter (ended September ’07–newer results aren’t in) was exceptionally bad, with an almost -40% margin. But as I dug deeper, I realized that this wasn’t such a bad thing. They retired (paid) $1.6 million of debt, after a capital infusion of several millions (“paid-in capital”). They still had an outstanding $8.24 million deficit, but it’s maybe a good sign.

I’d still have reservations, though: the past quarter saw $3.88 million revenues, generated with $5.4 million of operating expense. They’ve got to find a way to either cut these costs, or grow revenues. (Or, preferably, do both!) Recent announcements suggest that Reed has found some new distributors and supermarkets to carry their chain, which may be what they need to come into the black.

And after all of this, I realized something: I set out to see if I could buy their soda online. And I ended up scrutinizing the company’s financials.