Celsius Holdings Reports First Quarter 2014 Results

celsiusBOCA RATON, Fla. — Celsius Holdings, Inc., (Other OTC: CELH) the creator and marketer of Celsius®, the world’s first and only negative calorie drink backed by clinical science, today reported its results of operations for the three months ended March 31, 2014.

Recent company highlights: 

First Quarter Highlights – Comparison of Quarters Ended March 31, 2014 and 2013

  • Revenue increased 65% to $3.9 million.
  • Gross Profit increased 61% to $1.4 million.
  • Net Loss increased $298 thousand to $0.7 million; excluding one-time charges net loss decreased $79 thousand.
  • Revenue from International sales increased 133% to $2.3 million.
  • Revenue from Domestic sales increased 16% to $1.6 million.

We are very pleased to report continued strong financial results and a record first quarter as revenues grew to $3.9 million. The quarter was highlighted by the growth in existing international accounts and receipt of our initial orders from Brazil and Dubai. We also received our import and distribution certificate from the People’s Republic of China. Domestically, we continued our sales growth even though retailers and distributers were negatively impacted by the harsh record winter. We are making excellent progress and our products are resonating well with consumers. I am very encouraged that we continue to deliver revenue growth. In addition, as a result of our marketing initiatives we are attracting new daily consumers and industry-wide brand recognition. Celsius Public Relations efforts have generated over 200 million impressions in the first quarter of 2014 while our digital radio campaign continues to deliver 9 million ads each month that are focused in our “Drill Deep” markets, said Mr. Gerry David, Chief Executive Officer. “ In addition, we signed  worldwide endorsement agreements with;

  • Music industry superstar and fitness enthusiast Flo Rida, which will provide a connection to the 18-35 year old demographic including his 23 million social media followers  
  • NASCAR race team, Tri-Star Motor Sports, as an Associate Sponsor on three race cars which provides Celsius a platform to the 71 million avid NASCAR fans
  • NASCAR driver and Tri-athlete,  Blake Koch, who races in the Sprint and Nationwide Series

“Celsius product positioning places it in the three fastest growing categories in all of Health and Beauty, Weight Loss, Energy and Fitness beverages,” David continued.  “The demand for our unique beverage, is being driven by consumers wanting healthier options that are backed by science, to add to their healthy lifestyles.”

First Quarter 2014 Financial Results:

Revenue: Revenues for the three months ended March 31, 2014 totaled $3.87 million as compared to $2.34 million for the same period in 2013, a 65% increase. This increase was driven primarily by increases in international sales totaling $1.30 million or 133% and increases in domestic sales totaling $225 thousand or 16%. Domestically, we are seeing continued growth in key  segments. Domestic retail sales increased 21% versus the prior year and Health & Fitness sales increased 97%, off-set by domestic internet sales decrease of 12% as a result of out of stock replenishment system errors at Amazon which have been corrected. In addition liquidator sales decreased $70 thousand or 100% versus the prior year.

Gross Profit: Gross profits for the three months ended March 31, 2014 totaled $1,383 thousand or 36% of sales as compared to $870 thousand or 37% of sales for the same period in 2013. The Company continues to focus on cost saving initiatives and efficiencies to improve gross profit margins.

Operating Expenses: Operating Expenses for the three months ended March 31, 2014 totaled $1,940 thousand as compared to $1,246 thousand for the same period in 2013, a 56% increase. A significant portion of the increases are associated with increases in marketing programs. $596 thousand related to increased digital radio marketing programs, sampling programs, and celebrity endorsement licensing agreements. In addition, option expense increased $50 thousand, warehousing increased $33 thousand, broker and contractor increased $8 thousand, and additional investments in human resources totaled $33 thousand, off-set by savings from other sales & admin expense $25 thousand.

Net Loss: The Company recorded a net loss of $703 thousand for the three months ended March 31, 2014 compared to a net loss of $405 thousand for the same quarter a year ago, or ($0.03) and ($0.02) per share, respectively. A significant portion of the increases in loss are associated with 2014 one-time charges relating to celebrity endorsements totaling $303 thousand which includes endorsement licensing fees of $105 thousand and $198 thousand in common stock and a decrease in positive changes in a fair value derivative totaling $74 thousand from 2013 associated with the termination of an option derivative agreement. Excluding one-time charges adjusted net loss for the three months ended March 31, 2014 totals $401 thousand compared to an adjusted net loss of $480 thousand for the same quarter a year ago.

 


Celsius Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

 

   

 

 

 

   

March 31

 

December 31

ASSETS    

2014

 

2013

     

   

Current assets:    

   

Cash and cash equivalents  

$

148,445  

$

221,906
Accounts receivable, net  

2,914,605  

1,491,550
Inventories, net  

780,068  

821,271
Other current assets  

539,768  

426,272
Total current assets  

4,382,886  

2,960,999
   

   

 
Property, fixtures and equipment, net  

 64,720  

 68,713
Total Assets  

$

4,447,606  

$

3,029,712
   

   

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:  

   

 
Accounts payable and accrued expenses  

$

1,189,008  

$

886,624
Short-term liabilities – other  

689,908  

448,991
Total current liabilities  

1,878,916  

1,335,615
   

   

 
Long-term liabilities  

   

 
Convertible note payable, related party  

1,500,000  

1,500,000
Note due to related parties  

7,400,000  

6,100,000
Total Liabilities  

10,778,916  

8,935,615
   

   

 
Stockholders’ Equity (Deficit):  

   

 
Preferred Stock

Common stock

 

2

20,429

 

2

20,179

Additional paid-in capital  

39,475,224  

36,197,621
Accumulated deficit  

(45,826,965)  

(45,123,705)
Total Stockholders’ Equity (Deficit)  

(6,331,310)  

(5,905,903)
Total Liabilities and Stockholders’ Equity (Deficit)  

$

4,447,606  

$

3,029,712

 

Celsius Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

 

                                                                                                             For the Three Months                                                                                                                                                                           Ended March 31,

 

 

2014

2013

Revenue $

3,867,484

$

2,342,371

Cost of revenue

2,484,534

1,472,735

Gross profit

1,382,950

869,636

Selling and marketing expenses

1,494,750

870,359

General and administrative expenses

445,719

375,409

Total operating expense

1,940,469

1,245,768

Loss from operations

(557,519)

(376,132)

Interest expense, net

145,741

103,668

Gain or Loss from Derivative  

 

(74,400)

Net loss $

(703,260)

$

(405,400)

  Weighted average shares outstanding

20,237,365

20,179,032

   Loss per share $

(0.03)

$

(0.02)

About Celsius Holdings, Inc.

Celsius Holdings, Inc. (Other OTC: CELH.PK) markets Celsius®, which is backed by science. Celsius is dedicated to providing healthier, everyday refreshment through science and innovation. 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.