Gross Margin Expands on Higher Volumes, Positive
Adjusted EBITDA* Achieved of $379,000
BOCA RATON, FL / ACCESSWIRE / November 10, 2016
/ Celsius Holdings Inc. (OTCQX: CELH), the creator and
marketer of Celsius®, the leading global fitness drink, today
reported financial results for the three and nine month periods
ended September 30, 2016.
Third Quarter 2016 Highlights:
- Revenue of $6.7 million, up 82% compared to $3.7 million in the
year ago quarter
-
- Domestic revenue increased 53% to $3.8 million, up from $2.5
million in the year ago quarter
- International revenue increased 147% to $2.8 million, up from
$1.1 million in the year ago quarter
- Gross profit margin of 43.3% compared to 41.3% in the year ago
quarter
- Net loss available to common stockholders of $(93,000) compared
to $(895,000) in the year ago quarter
- Non-GAAP Adjusted EBITDA* of $379,000 compared to an Adjusted
EBITDA loss of $(628,000) million in the year ago quarter
- Signed exclusive Singapore distribution agreement with YHS
Singapore
Subsequent to Quarter End:
- Products shipped in Q4 for Singapore official launch party
scheduled for November 11th, 2016
- Entered distribution partnership to make Celsius available in
over 550 U.S. military bases globally
"Our third quarter results reflect the momentum we are gaining
with global distribution expansion and strong domestic consumer
demand for our products," said Gerry David, Chief Executive
Officer. "Sales volumes increased dramatically in our international
markets as a result of a full quarter of normalized revenue from
our Sweden/Finland distribution partner as well as reorders from
the newly launched Finland expansion. On the domestic front, we are
in the early stages of placing a variety of Celsius products in
U.S. Army/Air Force base stores, with anticipated placement in 550
locations globally under a newly signed distribution agreement. All
channels of distribution grew at double digit rates, continuing to
provide a multi-channel approach to our distribution strategy. At
the same time, our focus on lowering our cost of raw materials
drove a 200-basis point increase in our gross margin during the
third quarter. We continue to take a controlled and balanced
approach to new business development in order to optimize product
placement, and establish a solid foundation for sustainable
growth."
Three Months Ended September 30, 2016 Compared to
Three Months Ended September 30, 2015
Revenue
Revenue for the three months ended September 30, 2016 and
September 30, 2015 was $6.7 million and $3.7 million, respectively,
an increase of 82%. This increase was driven primarily by a 147%
increase in international revenue mainly from the company's Swedish
distribution partner and a 53% growth in domestic revenue
associated from blended growth rates of 54% in retail accounts
mainly from expansion of convenience store distribution
initiatives, 80% growth in health and fitness accounts and 13%
growth in internet retailer accounts from the same period in
2015.
Gross profit
Gross profit was $2.9 million, or 43.3% of revenue, in the three
months ended September 30, 2016 compared to $1.4 million, or 41.3%
of revenue, for the same period in 2015. The increases in gross
profit and the improvement in gross profit margins from the 2015 to
the 2016 periods are primarily attributable to the increases in
revenue and reductions in the cost of raw materials.
Operating expenses
Sales and marketing expenses for the three months ended
September 30, 2016 and September 30, 2015 were $1.7 million and
$1.6 million, respectively. The increase is due primarily to
increases in investments in human resources of $433,000 and
warehousing offset by savings in marketing programs of $354,000.
General and administrative expenses for the three months ended
September 30, 2016 and September 30, 2015 were $1.1 million and
$617,000, respectively. The increase was primarily due to increases
in option expense of $191,000, increases in professional fees of
$180,000, investments in human resources of $59,000, and office
related costs of $49,000, offset by lower research and development
and depreciation and amortization expenses.
Other expense
Total other expense was approximately $58,000 for the three
months ended September 30, 2016 and September 30, 2015.
Net Income (Loss)
As a result of the all above, for the three months ended
September 30, 2016, Celsius had a net income of approximately
$10,000, and after giving effect to preferred stock dividends of
$102,958, a net loss available to common stockholders of $93,008 or
$0.00 per share based on a weighted average of 38,666,451 shares
outstanding. In comparison, for the three months ended September
30, 2015 we had a net loss of $810,033, and after giving effect to
preferred stock dividends of $85,452, a net loss available to
common stockholders of $895,485 or $0.02 per share based on a
weighted average of 38,380,382 shares outstanding.
Nine Months Ended September 30, 2016 Compared to
Nine Months Ended September 30, 2016
Revenue
Revenue for the nine months ended September 30, 2016 and
September 30, 2016 was $16.5 million and $13.0 million,
respectively, an increase of 27%. This increase was driven
primarily by a 64% increase in domestic revenues associated from
blended growth rates of 76% in retail accounts, 52% in health and
fitness accounts and 31% growth in internet retailer accounts from
the same period in 2015. This growth was partially offset by an 8%
decrease in international revenue. The increase in total revenue
was primarily attributable to an increase in sales volume, as
opposed to increases in product pricing.
Gross Profit
Gross profit was$7.2 million, or 43.4% of revenue, in the nine
months ended September 30, 2016 compared to $5.4 million, or 41.5%
of revenue, for the same period in 2015.
Operating expenses
Sales and marketing expenses for the nine months ended September
30, 2016 and September 30, 2015 were $6.7 million and $3.7 million,
respectively. The increase is due primarily to increases in
investments in marketing programs of $1.5 million and increases in
human resource investments of $1.5 million. General and
administrative expenses for the nine months ended September 30,
2016 and September 30, 2015 were $2.9 million and $2.5 million,
respectively.
Other expense
Total other expense decreased to $171,000 for the nine months
ended September 30, 2016, down from $265,000 for the same nine
month period in 2015 as a result of lower interest expense.
Net Loss
As a result of the all above, for the nine months ended
September 30, 2016, Celsius had a net loss of $2,648,073, and after
giving effect to preferred stock dividends of $276,264, a net loss
available to common stockholders of $2,924,337 or $0.08 per share
based on a weighted average of 38,530,195 shares outstanding. In
comparison, for the nine months ended September 30, 2015 we had a
net loss of $1,083,968, and after giving effect to preferred stock
dividends of $193,394, a net loss available to common stockholders
of $1,277,362 or $0.04 per share based on a weighted average of
31,421,909 shares outstanding.
Liquidity and Capital Resources
As of September 30, 2016, the company had cash of $7.8 million
compared to $10.1 million as of December 31, 2015. The company had
working capital of $11.7 million and $13.2 million as of September
30, 2016 and December 31, 2015, respectively.
Cash used in operations during the nine months ended September
30, 2016 totaled $2.4 million. The company incurred a net loss of
$2.9 million during the nine months ended September 30, 2016,
increasing the accumulated deficit to $52.8 million as of September
30, 2016.
Conference Call
Management will host a conference call today, Thursday, November
10, 2016 at 4:30 pm ET to discuss the results with the investment
community.
To participate in the conference call, please call one of the
following telephone numbers at least 10 minutes before the start of
the call:
US: 877-709-8150
International: 201-689-8354
An audio replay of the call will be available on the Company's
website at http://celsius.com/press-releases/.
Disclosures can be found on the Company's online disclosure
portal at: http://www.otcmarkets.com/stock/CELH/filings
About Celsius Holdings, Inc.
Celsius Holdings, Inc. (OTCQX: CELH) is a global nutritional
science based company, founded in April 2004. Celsius® negative
calorie drink is available in the form of ready to drink and powder
formulas powered by MetaPlus™, a proprietary blend of quality
ingredients including Green Tea with EGCG, Ginger, Taurine,
Guarana, and B and C vitamins. Backed by multiple published
university studies, drinking Celsius before exercise has been
proven to help burn more body fat, burn 100 calories and more per
serving and provide healthy energy.
Celsius comes in seven delicious flavors, carbonated and
non-carbonated, and also in powder stick formulas that can be mixed
with water. Celsius has no preservatives, no aspartame, no high
fructose corn syrup, no artificial flavors or colors and is very
low in sodium. The Celsius line of products is Kosher, vegan
certified, Gluten Free, and sugar free. 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.
Celsius is available nationwide at retailers across all
channels, including supermarkets, convenience stores, nutritional
stores, mass merchants, health clubs, spas, gyms, specialty stores,
the military and eCommerce websites.
For additional 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.
Investor Relations:
Hayden IR
Brett Maas (646) 536-7331
brett@haydenir.com
or
Cameron Donahue
(651) 653-1854
cameron@haydenir.com
Celsius Holdings, Inc. and
Subsidiaries
Consolidated Balance
Sheets
|
|
September 30,
2016
(Unaudited)
|
|
|
December 31,
2015 (1)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
7,765,707
|
|
|
$
|
10,128,320
|
|
Accounts receivable, net
|
|
|
3,402,272
|
|
|
|
2,127,060
|
|
Inventories, net
|
|
|
2,106,329
|
|
|
|
2,322,904
|
|
Prepaid expenses and other current assets
|
|
|
937,534
|
|
|
|
666,267
|
|
Total current assets
|
|
|
14,211,842
|
|
|
|
15,244,551
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
36,508
|
|
|
|
21,319
|
|
Total Assets
|
|
$
|
14,248,350
|
|
|
$
|
15,265,870
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
1,710,504
|
|
|
$
|
1,805,931
|
|
Accrued preferred dividend
|
|
|
314,888
|
|
|
|
190,847
|
|
Deferred revenue and other current liabilities
|
|
|
536,536
|
|
|
|
25,057
|
|
Total current liabilities
|
|
|
2,561,928
|
|
|
|
2,021,835
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
Line of credit note payable-related party
|
|
|
4,500,000
|
|
|
|
4,500,000
|
|
Total Liabilities
|
|
|
7,061,928
|
|
|
|
6,521,835
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity:
|
|
|
|
|
|
|
|
|
Preferred Stock, $0.001 par value; 2,500,000 shares authorized,
6,380 and 6,380 shares issued and outstanding at September 30, 2016
and December 31, 2015
|
|
|
6
|
|
|
|
6
|
|
Common stock, $0.001 par value; 75,000,000 shares authorized,
38,666,451 and 38,380,380 shares issued and outstanding at
September 30, 2016 and December 31, 2015, respectively
|
|
|
38,666
|
|
|
|
38,380
|
|
Additional paid-in capital
|
|
|
59,992,650
|
|
|
|
58,626,212
|
|
Accumulated deficit
|
|
|
(52,844,900
|
)
|
|
|
(49,920,563
|
)
|
Total Stockholders' Equity
|
|
|
7,186,422
|
|
|
|
8,744,035
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
14,248,350
|
|
|
$
|
15,265,870
|
|
(1) Derived from Audited Financial Statements
Celsius Holdings, Inc. and
Subsidiaries
Consolidated Statements of
Operations
|
|
For the three months
ending September 30,
|
|
|
For the nine months
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Revenue
|
|
$ |
6,657,700 |
|
|
$ |
3,652,424 |
|
|
$ |
16,508,097 |
|
|
$ |
12,957,334 |
|
Cost of revenue
|
|
|
3,772,948 |
|
|
|
2,143,676 |
|
|
|
9,339,302 |
|
|
|
7,581,897 |
|
Gross profit
|
|
|
2,884,752 |
|
|
|
1,508,748 |
|
|
|
7,168,795 |
|
|
|
5,375,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expenses
|
|
|
1,736,029 |
|
|
|
1,644,090 |
|
|
|
6,709,345 |
|
|
|
3,686,596 |
|
General and administrative expenses
|
|
|
1,081,273 |
|
|
|
616,703 |
|
|
|
2,936,273 |
|
|
|
2,508,088 |
|
Total operating expense
|
|
|
2,817,302 |
|
|
|
2,260,793 |
|
|
|
9,645,618 |
|
|
|
6,194,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) from operations
|
|
|
67,450 |
|
|
|
(752,045 |
) |
|
|
(2,476,823 |
) |
|
|
(819,247 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(57,500 |
) |
|
|
(57,988 |
) |
|
|
(171,250 |
) |
|
|
(264,721 |
) |
Total Other Income (Expense)
|
|
|
(57,500 |
) |
|
|
(57,988 |
) |
|
|
(171,250 |
) |
|
|
(264,721 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$ |
9,950 |
|
|
$ |
(810,033 |
) |
|
$ |
(2,648,073 |
) |
|
$ |
(1,083,968 |
) |
Preferred stock dividend
|
|
|
(102,958 |
) |
|
|
(85,452 |
) |
|
|
(276,264 |
) |
|
|
(193,394 |
) |
Net Income (Loss) available to common stockholders
|
|
$ |
(93,008 |
) |
|
$ |
(895,485 |
) |
|
$ |
(2,924,337 |
) |
|
$ |
(1,277,362 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ |
(0.00 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
Diluted
|
|
$ |
(0.00 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
38,666,451 |
|
|
|
38,380,382 |
|
|
|
38,530,195 |
|
|
|
31,421,909 |
|
Diluted
|
|
|
38,666,451 |
|
|
|
38,380,382 |
|
|
|
38,530,195 |
|
|
|
31,421,909 |
|
Celsius Holdings,
Inc.
Reconciliation of Non-GAAP Financial
Measure
|
|
Three months ended September 30,
|
|
|
Nine months ended June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net income (loss) available to common stockholders (GAAP
measure)
|
|
|
(93,008 |
) |
|
|
(895,485 |
) |
|
|
(2,924,337 |
) |
|
|
(1,277,362 |
) |
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
4,978 |
|
|
|
8,670 |
|
|
|
12,346 |
|
|
|
26,521 |
|
Net interest expense
|
|
|
57,500 |
|
|
|
57,988 |
|
|
|
171,250 |
|
|
|
264,721 |
|
Preferred stock dividend
|
|
|
102,958 |
|
|
|
85,452 |
|
|
|
276,264 |
|
|
|
193,394 |
|
Stock-based compensation
|
|
|
306,290 |
|
|
|
115,860 |
|
|
|
1,361,398 |
|
|
|
1,157,959 |
|
Adjusted EBITDA
|
|
$ |
378,718 |
|
|
$ |
(627,515 |
) |
|
$ |
(1,103,079 |
) |
|
$ |
365,233 |
|
*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.
SOURCE: Celsius Holdings, Inc.
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