Celsius Holdings, Inc. Reports Second Quarter 2014 Financial Results

Boca Raton, Florida, UNITED STATES

BOCA RATON, Fla., Aug. 8, 2014 (GLOBE NEWSWIRE) -- 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 six months ended June 30, 2014.

Results for the second quarter reflect investments in transitioning international production to Dusseldorf, Germany which provides the Company a firm footing for continued international expansion and reduced inventory lead times for customers resulting in more frequent inventory turns. Revenues for the quarter were impacted due to this transition. Domestically, the Company continues to invest in key "Drill Deep" regions through Social and Digital Media, Celebrity Endorsements, and Ambassador Teams.

"We are making excellent progress and our products are resonating well with consumers both domestically and abroad. Over the last nine months we worked diligently and took steps to improve the Company's sales cycle and lead times for our current and future customers abroad with much success. In addition, as a result of our marketing initiatives, we continue to attract new daily consumers and industry-wide brand recognition," said Mr. Gerry David, Chief Executive Officer. According to IRI domestic data for a 52 week rolling period ending 6-15-14, Celsius was ranked 112 out of 599 brands in the Energy, RTD Coffee/Tea, Waters, Isotonic, Functional, Water and Coconut Water. Celsius was +43%/dollar volumes, +88%/unit volumes. Of the top 125 brands, 59 (47%) are declining in sales while Celsius continues its growth domestically. Celsius is now outperforming brands such as FRS, Activate, Karma and others domestically, David added.

Second Quarter Highlights – Comparison of Quarters Ended June 30, 2014 and 2013:

  • Revenue decreased 10% to $2.7 million, compared to $3.0 million last year.
    • International revenues decreased 25% to $1.1 million as a result of unforeseen delays in manufacturing due to mechanical issues and a reduction in inventory lead times by 45 days associated with transitioning international manufacturing to Germany.
    • Domestic revenues increased 4% to $1.6 million as a result of an 11% increase in domestic retail revenue offset by decreases in internet retail revenue of 12% as a result of timing from customer replenishment systems and a 4% decrease in health and fitness distributors as a result of cycling an initial fill order during the second quarter of 2013.
  • Gross margin remained relatively flat at 39.3% of revenue, compared to 39.4% of revenue last year.
  • Operating expenses increased $374,000, or 28.7%, to $1.7 million, compared to $1.3 million last year. This increase is mainly associated with additional investments in marketing, option expense, professional fees, and investments in human resources.
  • Net loss increased to $756,000, or $0.04 per share, compared to a net loss of $228,000, or $0.01 per share, last year, an increase of $528,000.

Year-to-Date Highlights – Comparison of Six Months Ended June 30, 2014 and 2013:

  • Revenue increased 23% to $6.6 million, compared to $5.4 million last year.
    • International revenues increased 39% to $3.4 million.
    • Domestic revenues increased 10% to $3.2 million as a result of a 15% increase in domestic retail revenue and a 32% increase in health and fitness distributors, offset by a 12% decrease in internet retail revenue as a result of transitioning direct internet revenues to internet retail customers and the elimination of a liquidator sale.
  • Gross margin decreased to 37.2% of revenue, compared to 38.4% of revenue last year.
  • Operating expenses increased $1.1 million to $3.6 million, compared to $2.5 million last year.
  • Net loss increased to $1.46 million, or $(0.07) per share, compared to a net loss of $634,000, or $(0.03) per share, last year, an increase of $826,000.

More information about the Company's operations or financial results is included in its most recent quarterly disclosure statement filed with the OTC Marketplace.

Recent Highlights

  • Expanded relationship with Publix located throughout the South East to now include three sku's Sparkling Orange, Raspberry Acai Green Tea, and Peach Mango Green Tea in addition product placement on the self was improved.
  • Expanded relationship with 24 Hour Fitness to now include Sparkling Orange and Raspberry Acai Green Tea.
  • Expanded relationship with GNC to now include Sparkling Orange, Raspberry Acai Green Tea, and Sparkling Wild Berry.
  • Expanded distribution to 71 Discount Drug Mart stores throughout Ohio
  • Expanded distribution to 200 Tedeschi stores throughout New England
  • Selected to participate in a Target 45 store functional cooler test
  • New product launch - Flo Fusion, pre-workout powder at GNC in August 2014 as part of the worldwide endorsement and licensing agreement with music industry superstar Flo Rida
  • Worldwide endorsement agreement signed in July with World Champion Race Driver Emerson Fittipaldi to serve as a Celsius Brand Ambassador thought the world with a focus in the country of Brazil.
Celsius Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
  June 30, 2014 December 31, 2013
Current assets:    
Cash and cash equivalents  $ 179,652  $ 221,906
Accounts receivable, net 1,233,947 1,491,550
Inventories, net 1,062,548 821,271
Prepaid expenses and other current assets 1,016,975 426,270
Total current assets 3,493,122 2,960,997
Property, fixtures and equipment, net 58,995 68,713
Total Assets  $ 3,552,117  $ 3,029,710
Current liabilities:    
Accounts payable and accrued expenses  $ 1,001,472  $ 840,057
Accrued preferred dividend 112,935 46,567
Deferred revenue and other current liabilities 338,019 448,991
Total current liabilities 1,452,426 1,335,615
Long-term liabilities    
Convertible note payable, related party 1,500,000 1,500,000
Note payable-related party 7,575,000 6,100,000
Total Liabilities 10,527,426 8,935,615
Stockholders' Equity (Deficit):    
Preferred Stock, $0.001 par value; 2,500,000 shares authorized, 2,200 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively. 2 2
Common stock, $0.001 par value; 50,000,000 shares authorized, 20,429,032 and 20,179,032 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively 20,429 20,179
Additional paid-in capital 39,652,873 39,263,208
Accumulated deficit (46,648,613) (45,189,294)
Total Stockholders' Equity (Deficit) (6,975,309) (5,905,905)
Total Liabilities and Stockholders' Equity (Deficit)  $ 3,552,117  $ 3,029,710
Celsius Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations
  For the three months 
ended June 30,
For the six months 
ended June 30,
  2014 2013 2014 2013
Revenue  $ 2,729,525  $ 3,018,759  $ 6,597,009  $ 5,361,130
Cost of revenue 1,656,450 1,830,873 4,140,984 3,303,608
Gross profit 1,073,075 1,187,886 2,456,025 2,057,522
Selling and marketing expenses 1,140,003 926,237 2,634,753 1,796,596
General and administrative expenses 535,901 376,102 981,620 751,511
Total operating expense 1,675,904 1,302,339 3,616,373 2,548,107
Loss from operations (602,829) (114,453) (1,160,348) (490,585)
Other Income (Expense):        
Interest expense, net (119,863) (113,894) (232,603) (217,562)
(Loss) on change in fair value of derivative liability -- -- -- (6,000)
Gain from termination of option agreement -- -- -- 80,400
Total Other Income (Expense) (119,863) (113,894) (232,603) (143,162)
Net loss  $ (722,692)  $ (228,347)  $ (1,392,951)  $ (633,747)
Accrued preferred stock dividend (33,367) -- (66,368) --
Net loss available to common stockholders  $ (756,059)  $ (228,347)  $ (1,459,319)  $ (633,747)
Weighted average shares outstanding 20,429,032 20,179,032 20,332,347 20,179,032
Loss per share, basic and diluted common shareholders  $ (0.04)  $ (0.01)  $ (0.07)  $ (0.03)

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.


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