Celsius Holdings Reports Third Quarter Financial Results

celsiusBOCA RATON, Fla. — Celsius Holdings, Inc., (Other OTC: CELH) the creator and marketer of Celsius®, the world’s first Negative Calorie beverage backed by clinical science, today reported its results of operations for the three and nine month ended September 30, 2014.

Third Quarter 2014 Highlights:

  • Revenue increased 47% to $3.42 million, compared to $2.33 million last year
  • International revenue increased 60% to $1.55 million, compared to $0.97 million last year
  • Domestic revenue increased 38% to $1.87 million, compared to $1.36 million last year
  • Gross margin remained consistent at 39%
  • Net Loss excluding special charges decreased to $550,000, a 21% improvement compared to the net loss of $700,000 last year.
  • The GAAP net loss increased to $830,000 compared to a net loss of $700,000 last year.

We are very pleased to report record third quarter financial results as third quarter revenues grew to $3.42 million. The quarter was highlighted by the growth in existing international accounts and expansion into Brazil. Domestically, we continued our sales growth and are making excellent progress and our products are resonating well with consumers” said Mr. Gerry David, Chief Executive Officer. “Our partnerships with multi-platinum recording artist, Flo Rida, and NASCAR race team TriStar Motorsports and driver Blake Koch, are opening up new demographics for our one of a kind drink that promotes weight management,” David continued.  “Our scheduled launch in Brazil with our partners, two time world Formula One Champion, Emerson Fittipaldi, and Latco Beverages, will provide an exciting opportunity for growth.”

Three months ending September 30, 2014 Financial Results:

Revenue: Revenues for the three months ended September 30, 2014 totaled $3.42 million as compared to $2.33 million for the same period in 2013, a 47% increase. This increase was associated with increased international sales increasing 60% or $582 thousand as a result of increases from existing accounts and initial sales to Brazil. In addition, domestic sales increased 38% or $513 thousand, this increase was mainly associated with increases in domestic retail accounts increasing 53% and health & fitness accounts increasing 66%, off-set by internet segment decreases of 6% and the elimination of a liquidator sale which took place during the same period in 2013. 

Gross Profit: Gross profits for the three months ended September 30, 2014 totaled $1.32 million or 39% of sales as compared to $904 thousand or 39% during the same period in 2013. The Company continues to focus on cost savings initiatives and efficiencies to improve gross profit margins.

Operating Expenses: Operating Expenses for the three months ended September 30, 2014 totaled $1.99 million as compared to $1.50 million for the same period in 2013, a $495 thousand or 33% increase. A significant portion of this increase is associated with increases in stock based compensation expense increasing $365 thousand, additional increases in marketing programs, and investment in human resources.

Net Loss: The Company recorded a net loss of $828 thousand for the three months ended September 30, 2014 compared to a net loss of $698 thousand for the same quarter a year ago, or ($0.04) and ($0.03) per share, respectively. On a non-GAAP basis, excluding special one-time items including celebrity endorsements, Net loss decreased to $546 thousand, or $.03 per share, compared to a net loss of $698 thousand, or $0.03 per share last year.

Nine months ending September 30, 2014 Financial Results:

Revenue: Revenues for the nine months ending September 30, 2014 totaled $10.02 million as compared to $7.69 million in 2013, a 30% increase. This increase was associated with a 45% increase in international sales increasing $1.53 million and increases in domestic sales increasing 19% or $801 thousand, this increase in domestic sales was mainly associated with increases in domestic retail accounts increasing 27% and health & fitness accounts increasing 42%, off-set by internet segment decreases of 10% and the elimination of liquidator sales which took place during the same period in 2013.

Gross Profit: Gross profits for the nine months ending September 30, 2014 totaled $3.78 million or 38% of sales as compared to $2.96 million or 39% for the same period in 2013. Gross profit margins were impacted by increases in international sales mix. The Company continues to focus on cost savings initiatives and efficiencies to improve gross profit margins.

Operating Expenses: Operating Expenses for the nine months ending September 30, 2014 totaled $5.61 million as compared to $4.04 million for the same period in 2013, a 38% increase. A significant portion of this increase is associated with increases in stock based compensation expense increasing $683 thousand, additional increases in marketing programs of $617 thousand, and additional investment in human resources.

Net Loss: The Company recorded a net loss of $2.29 million for the nine months ending September 30, 2014 compared to a loss of $1.33 million for the same period a year ago, or ($0.11) and ($0.07) per share, respectively. On a non-GAAP basis, excluding special one-time items including celebrity endorsements, Net loss increased to $1.71 million, or $.08 per share, compared to a net loss of $1.41 million, or $0.07 per share last year.


 

 

Celsius Holdings, Inc. and Subsidiaries

 

Consolidated Balance Sheets

(Unaudited)

 

 

 
   

 

 

 

 
   

    September  30, 2014

 

December 31, 2013

 
ASSETS    

 

     

   

Current assets:    

   

Cash and cash equivalents  

$

427,160  

$

221,906

Accounts receivable, net  

1,196,442  

1,491,550

Inventories, net  

1,413,263  

821,271

Prepaid expenses and other current assets  

685,065  

426,270

Total current assets  

3,721,930  

2,960,997

   

   

Property, fixtures and equipment, net  

 53,087  

 68,713

Total Assets  

$

3,775,017  

$

3,029,710

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 
Current liabilities:  

   

   
Accounts payable and accrued expenses  

$

869,222  

$

840,057

 
Accrued preferred dividend  

146,669  

46,567

 
Deferred revenue and other current liabilities  

73,728  

448,991

 
Total current liabilities  

1,089,619  

1,335,615

 
   

   

 
Long-term liabilities  

   

 
Convertible note payable, related party  

1,500,000  

1,500,000

 
Note payable-related party  

8,575,000  

6,100,000

 
Total Liabilities  

11,164,619  

8,935,615

 
   

   

   
Stockholders’ Equity (Deficit):  

   

   
Preferred Stock, $0.001 par value; 2,500,000 shares authorized, 2,200 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively.  

2  

2

 
Common stock, $0.001 par value; 50,000,000 shares authorized, 20,459,032 and 20,179,032 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively  

20,459  

20,179

 
Additional paid-in capital  

40,067,028  

39,263,208

 
Accumulated deficit  

(47,477,091)    

(45,189,294)

 
Total Stockholders’ Equity (Deficit)  

(7,389,602)  

  (5,905,905)

 
Total Liabilities and Stockholders’ Equity (Deficit)  

$

3,775,017  

$

3,029,710

 
  

Celsius Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

For the Three Months        Ended September 30,

For the Nine Months            Ended September 30,

2014

2013

2014

2013

Revenue

$

3,422,300

$

2,327,039

$

10,019,309

$

7,688,169

Cost of revenue

2,100,539

1,422,582

6,241,523

4,726,190

Gross profit

 1,321,761

    904,457

 3,777,786

 2,961,979

Selling and marketing expenses

 1,163,584

 1,084,345

 3,798,337

 2,880,941

General and administrative expenses

    826,657

    410,778

 1,808,277

 1,162,289

Total operating expense

 1,990,241

 1,495,123

 5,606,614

 4,043,230

Loss from operations

   (668,480)

   (590,666)

(1,828,828)

(1,081,251)

Other Income (Expense):
Interest expense, net

  (126,264)

     (94,504)

   (358,867)

   (312,066)

(Loss) on change in fair value of derivative liability

                –

                –

                –

       (6,000)

Gain from termination of option agreement

                –

                –

         –

      80,400

Total Other Income (Expense)

   (126,264)

     (94,504)

   (358,867)

   (237,666)

Net loss

$

   (794,744)

$

   (685,170)

$

(2,187,695)

$

(1,318,917)

Accrued preferred stock dividend

     (33,734)

     (12,833)

   (100,102)

     (12,833)

Net loss available to common stockholders

$

   (828,478)

$

   (698,003)

$

(2,287,797)

$

(1,331,750)

Weighted average shares outstanding

20,444,684

20,179,032

20,370,204

20,179,032

Loss per share, basic and diluted common shareholders

$

         (0.04)

$

         (0.03)

$

         (0.11)

$

         (0.07)

About Celsius Holdings, Inc.

Celsius Holdings Inc. (OTC: CELH) is a science-based functional beverage company, founded in April 2004 to launch the world’s first negative calorie beverage. The evolution of the beverage market has evolved from high calorie to low calorie to zero calorie. Celsius® negative calorie beverage is unique worldwide and deeply rooted in science. The first clinical study was conducted in 2005. Six additional studies, including five from the University of Oklahoma, were conducted over the next five years. The studies validated the unique benefits Celsius provides to the consumer. For more information, please visit www.celsius.com.

Forward-Looking Statements

This press release may contain statements that are not historical facts and are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements contain projections of Celsius Holdings’ future results of operations and/or financial position, or state other forward-looking information. In some cases you can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” “would,” or similar words. You should not rely on forward-looking statements since Celsius Holdings’ actual results may differ materially from those indicated by forward-looking statements as a result of a number of important factors. These factors include, but are not limited to: general economic and business conditions; our business strategy for expanding our presence in our industry; anticipated trends in our financial condition and results of operation; the impact of competition and technology change; existing and future regulations affecting our business; and other risks and uncertainties discussed in the reports Celsius Holdings has filed previously with the Securities and Exchange Commission. Celsius Holdings does not intend to and undertakes no duty to update the information contained in this press release.