Boca Raton, FL (November 10, 2015) – Celsius Holdings, Inc., (OTC: CELH) the creator and marketer of Celsius®, the world’s first negative calorie, healthy energy and fat burning drink backed by clinical science, today reported financial results for the third quarter of 2015.
Third Quarter 2015 Financial Highlights Include:
- Revenue grew 7% to a record $3.65 million, from $3.42 million in the third quarter of last year
- Domestic revenue increased 35% to $2.52 million, from $1.87 million last year
- International revenue decreased 27% to $1.14 million, from $1.55 million in the comparable 2014 period as a
- result in timing of orders, recent acquisition of our Swedish distribution partner and relocation of business operations
- Gross profit margins improved to 41.3% from 38.6% in last year’s quarter
- Non-GAAP Adjusted EBITDA* Loss, excluding interest, stock based compensation, and depreciation expenses,
- increased to ($628,000) from ($245,000) in the comparable 2014 period
- Net Loss amounted to ($895,000), as compared to a loss of ($828,000) in the prior year
- Working capital has increased to $14.26 million, up from $3.54 million at December 31, 2014
Year-to-Date Highlights – Comparison of Nine Months Ended September 30, 2015 and 2014 Include:
- Revenue grew 29% to $12.96 million, compared to $10.02 million in the prior year
- International revenue grew 34% to $6.58 million, from $4.10 million in the comparable 2014 period
- Domestic revenue increased 25% to $6.37 million, from $5.11 million last year
- Gross profit margins improved to 41.5% from 37.7% in the prior year
- Non-GAAP Adjusted EBITDA*, excluding interest, stock based compensation, and depreciation expenses, increased to $365,000 from ($997,000) in the comparable 2014 period
- Net Loss amounted to ($1,277,000), as compared to a net loss of ($2,288,000) last year
“We achieved continued revenue growth domestically as sales grew 35% for the third quarter to $2.52 million. Domestically, the health & fitness channel continues to perform very well growing 49% for the quarter reinforcing Celsius as the #1 beverage choice for the health conscious consumer. We continue to focus on national and regional grocery chains as well as convenience stores throughout the Unites States. Most recently exhibiting at the National Association of Convenience Stores Show (NACS) where Celsius played a key sponsoring role in the event and garnered significant brand recognition,” said Mr. Gerry David, Chief Executive Officer. “International revenues for the period were effected by timing in orders from late shipments which took place in the second quarter and the recent acquisition of our Swedish distribution partner and its transition to the new ownership, resulting in international revenues decreasing 27% from the prior year. Our recent strategic partnership and equity investment led by Mr. Li Ki-Shing’s Horizons Ventures, Mr. Russell Simmons and Ms. Kimora Lee Simmons continues to make progress in the regulatory process and infrastructure planning. We see significant growth opportunities going forward in the domestic and international markets, through our traditional network, but importantly also from our new strategic partnership. We are investing heavily in our domestic marketing and sales initiatives through new marketing programs and the expansion of our “drill deep” markets, David continued. “Celsius brand awareness through our multi-faceted marketing programs and consumer engagement are at record levels.”
Three Months Ended September 30, 2015 Compared to Three Months Ended September 30, 2014
Net revenue for the three months ended September 30, 2015 and 2014 was approximately $3.65 million and $3.42 million, respectively, or an increase of 7%. This increase was associated with growth in domestic sales of 35% or $647,000 primarily associated with growth in domestic retail accounts of 25%, health & fitness accounts of 49% and internet retailers of 71% from the same period in 2014. This increase was offset by timing of orders, the acquisition of our Swedish distribution partner People’s Choice AB by Func Foods Group Oy, and the relocation of the distributor operations to Stockholm resulting in international sales decreasing 27% from the same period in 2014.
Gross Profit was $1.51 million in the three months ended September 30, 2015 as compared to $1.32 million for the same period in 2014. Gross Profit margins improved 2.7% to 41.3% in the three months ended September 30, 2015 versus the same period in 2014. We continue to remain focused on improving and maintaining gross profit margins.
Sales and marketing expenses for the three months ended September 30, 2015 and 2014 were approximately $1.64 million and $1.16 million, respectively. This increase was mainly associated with investments in marketing programs and human resources including the implementation of a field sales team. General and administrative expenses for the three months ended September 30, 2015 and 2014 were approximately $617,000 and $827,000, a decrease of $210,000. This decrease was mainly due to savings in expense from stock based compensation of $298,000, which was partially offset by increases in professional fees.
Total other expense decreased to $58,000 for the three months ended September 30, 2015 from $126,000 for the same three-month period in 2014, as a result of $68,000 of savings in interest expense.
Nine Months Ended September 30, 2015 Compared to Nine Months Ended September 30, 2014
Net revenue for the nine months ended September 30, 2015 and 2014 was approximately $12.96 million and $10.0 million, respectively. The growth of 29% from 2014 to the 2015 period was mainly associated with a blended growth of 34% in international sales and a 25% growth in domestic sales. Domestic sales growth of 25% was mainly associated with blended growth rates of 21% in domestic retail accounts, 29% growth in health and fitness accounts and 38% growth in internet retail accounts from the same period in 2014.
Gross Profit for the nine months ended September 30, 2015 was $5.38 million, as compared to $3.78 million for the same period in 2014. Gross Profit margins improved 3.8% to 41.5% in the nine months ended September 30, 2015 from the same period in 2014. We continue to remain focused on improving and maintaining gross profit margins.
Sales and marketing expenses decreased slightly to $3.69 million for the nine months period ended September 30, 2015 from $3.8 million for the same nine-month period in 2014, or a decrease of $112,000. The decrease was mainly due to timing in marketing programs and savings in celebrity endorsements, broker fees and other sales support, offset by investments in human resources. General and administrative expenses increased $700,000 to $2.51 million for the nine months period ended September 30, 2015 from $1.81 million for the same nine month period in 2014. This increase was mainly due to increased expense for stock based compensation, increased professional fees and increases in research and development costs.
Total other expense decreased to $265,000 for the nine months period ended September 30, 2014 from $359,000 for the same nine month period in 2014, as a result of $94,000 in savings in interest expense.
Liquidity and Capital Resources
As of September 30, 2015, we had cash and cash equivalents of approximately $11.9 million and working capital of $14.3 million. Cash received in operations during the nine month ended September 30, 2015 totaled $985,000. We incurred a net loss of $1.3 million during the nine months ended September 30, 2015, and our accumulated deficit increased to $48.6 million as of September 30, 2015.
Disclosures can be found on the Company’s online disclosure portal at:
About Celsius Holdings, Inc.
Celsius Holdings Inc. (OTC: CELH) is a science-based functional beverage company, founded in April 2004. Celsius is the world’s first negative calorie, healthy energy and fat burning drink. Backed by multiple university studies, drinking Celsius before exercise has been proven to help burn up to 93% more body fat, burn 100 calories and more per serving, boost metabolism, provide healthy clean energy and accelerate results of any weight-loss program. It comes in five delicious flavors, carbonated and non-carbonated, and also in powder stick packets that can be mixed with water. Celsius contains no sugar, no gluten, no high-fructose corn syrup, no aspartame, no preservatives, no artificial flavors or colors, and is low in sodium. The first university study was conducted in 2005, and additional studies from the University of Oklahoma were conducted over the next five years. All studies were published in peer reviewed journals and validated the unique benefits Celsius provides to the consumer. For more information, please visit www.celsius.com.
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 and currently files with OTC Markets, Inc. Celsius Holdings does not intend to and undertakes no duty to update the information contained in this press release.
*We report financial results in accordance with accounting principles generally accepted in the United States (“GAAP”), but believe that disclosure of adjusted EBITDA, a non-GAAP financial measure, may provide users with additional insights into operating performance. Adjusted EBITDA (in thousands) for the three months ended September 30, 2015 and September 30, 2014 totaled ($628,000) and ($245,000), respectively, are calculated by adding the following expenses back to Net Income: Depreciation & Amortization of $9,000 and $10,000; Net Interest Expense of $58,000 and $126,000; Preferred Stock Dividend of $85,000 and $34,000; and Stock Based Compensation of $116,000 and $414,000. Adjusted EBITDA (in thousands) for the nine months ended September 30, 2015 and September 30, 2014 totaled $365,000 and ($997,000), respectively, are calculated by adding the following expenses back to Net Income: Depreciation & Amortization of $27,000 and $28,000; Net Interest Expense of $265,000 and $359,000; Preferred Stock Dividend of $193,000 and $100,000; and Stock Based Compensation of $1,158,000 and $804,000.